Both the teams were chasing their maiden T20 world title, but the Kiwis once again faltered in the final hurdle, with the Dubai result serving as a cruel reminder of the 2015 ODI World Cup final.
But Williamson was gracious in defeat. The 31-year-old hailed the victors while also commending his teammates for showing heart.
Put in to bat by Australia, New Zealand set a 173-run target in Dubai, UAE on Sunday.
Williamson played a captain's knock (85 off 48) to revive the Kiwi innings after managing 57 runs in the first 10 overs. But their total proved too little as David Warner and Mitchell Marsh hit fifties and the duo's 92-run stand in 59 balls all but sealing the fate of the finale.
"There was a lot of heart shown, always nice to get to the big dance. But credit to Australia again. Some high hopes coming in, some good cricket played, so we're feeling it a bit," Williamson said after the match.
Talking about the slow start, Williamson revealed that they "were trying to get a platform, the surface was holding a fraction. Nice to build some partnerships and get what we thought was a competitive total, only to be chased superbly. They're a fantastic side, had a brilliant campaign and came out and turned it on."
Williamson added that "at halfway, we made every effort to get a good total. We weren't far away. Credit to the way Australia chase it, they didn't give us an inch. Wasn't to be today, but proud of how we've operated. Guys committed to what we tried to do in venues that varied a lot."
And with that Williamson once again ended up on the losing side in an Austalia vs New Zealand final. He was also part of the Kiwi team that lost to Australia in the 2015 ODI World Cup final.
But he will get another chance to win the elusive T20 World Cup in less than 12 months' time in Australia.