Australia have won the World Cup on home soil with a seven-wicket victory over New Zealand at the MCG.

Captain Michael Clarke led Australia to victory with an attacking performance in the final one day international of his career, scoring 11 boundaries in his knock of 74.

New Zealand batted first and were facing an uphill battle early on, with skipper Brendon McCullum bowled by Mitchell Starc for a duck in the first over.

Martin Guptill was dismissed by Glenn Maxwell for 15, before Kane Williamson was caught and bowled by Mitchell Johnson to bring the score to 38-3 after 12 overs.

Grant Elliot and Ross Taylor finally added some stability with scores of 40 and 83, but were undone by the bowling of James Faulkner as both directed shots into the hands of Brad Haddin.

Corey Anderson then went for a duck as Faulkner finished with bowling figures of 3-36.

Luke Ronchi and Matt Henry took the total of ducks to four for the innings as New Zealand failed to cope with the bowling of Johnson (3-30) and Starc (2-20).

Daniel Vettori (nine) and Tim Southee (11) took the New Zealand score to 183 all out.

Australia also had a nightmare start to their innings as Aaron Finch was caught and bowled by Trent Boult to leave the score at 2-1.

The Baggy Greens then asserted their dominance though, with David Warner eventually caught by Elliot after 45 quick runs.

The partnership of Clarke and Steve Smith led Australia to victory, with Clarke scoring 11 boundaries, including four fours in a row in the 30th over.

It would have been a fairytale for Clarke to have struck the winning runs, but he was bowled for 74 by Henry with nine runs still needed.

Shane Watson came into bat and hit the winning runs after 33 overs, with Smith ending with an unbeaten half-century.