Miller-Heidke said she was "totally overwhelmed" by the result.
The singer-songwriter and actress won with 87 points in the popular vote and 48 points from the judges, giving her 135 points overall.
Most notably, Kate has beaten Courtney Act to Eurovision glory, after the Celebrity Big Brother victor and RuPaul's Drag Race royalty entered the national selection with her song Fight For Love.
Electric Fields and Sheppard rounded out the top three. Electric Fields delivered a stellar performance, and came so close, but it was Kate's night.More news: Larry Sabato Discusses Democratic Party, Justin Fairfax Following 2nd Allegation
Co-written with her husband Keir Nuttall, Kate Miller-Heidke's song Zero Gravity explores the singer's experience with post-natal depression, which she suffered after the birth of her son, Ernie, in 2016.
The singer told the BBC he "100 percent" believed that his song, "Bigger Than Us", could carry Britain to glory on May 18.
He said that having faced abuse as a young child as well, he was driven to help others in similar situations.
Australia first competed in Eurovision in 2015, and until now its entrant had been decided by jury.More news: National Pizza Day 2019: Where to find free and cheap pizza today
Eurovision: You Decide viewers voted for him over performers Holly Tandy, Kerrie-Anne and Jordan Clarke on Friday (February 8), and Rice was confident that Europe would do the same in the Eurovision final. "So it's about that sense of becoming myself again".
This year will be Australia's fifth consecutive year in the contest, which will take place in Tel Aviv in May.
Three million Aussies watched Eurovision past year. Israeli pop star Netta Barzilai won Eurovision in 2018 with a quirky #MeToo-inspired entry, Toy. Around a dozen protesters representing the pro-Palestinian Boycott, Divestment, and Sanctions (BDS) movement demonstrated outside the venue, calling for artists, fans, and SBS itself to wind back its support of Israel's hosting duties.
Kate Miller-Heidke celebrates winning the 2019 Eurovision - Australia Decides final.More news: Reporter alleges Jill Abramson lifted material for her book