Australia won the women's Olympic 4x100 metres freestyle relay title for only the second time in nearly 50 years and broke the world record in a thrilling final on Saturday.

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Alice Mills, Libby Lenton, Petria Thomas and Jodie Henry clocked three minutes 35.94 seconds to beat the mark of 3:36.00 set by a German quartet at the European championships in Berlin in July 2002.

The Americans, who had won the event at the last three Olympics and were last beaten at the 1988 Seoul Games by East Germany, had to settle for silver in 3:36.39 while the Netherlands took bronze in 3:37.59.

Australia's only previous victory came at the 1956 Melbourne Games in the days of the great Dawn Fraser.

Germany's Antje Buschschulte handed over a narrow lead at the end of the first leg but 100 freestyle world record-holder Lenton stormed through to put Australia in front in the second leg, with the U.S. second and Germany third.

Amanda Weir overhauled Thomas to give the U.S. a taste of the lead but Commonwealth champion Henry stormed past Jenny Thompson on the anchor leg to bring the gold to Australia with the fastest split of 52.95.

Thompson's silver was the 11th Olympic medal of her career, matching the tally of her compatriot Mark Spitz.

Inge de Bruijn, triple gold medallist at the 2000 Sydney Games, also produced a snappy last leg of 53.37 to overhaul German rival Franziska van Almsick and give the Netherlands bronze.