Lucy, 19, was five-under par when she won the title, wrapping up the match on the par-three 16th where her three wood shot hit the hole. Her 2ft putt was conceded.
Between them, the two players had 10 birdies in a match of the highest quality.
I am so happy this is great, said Lucy, from Mid-Herts. I really felt I hit the ball well today, it was the best I played all week.
She produced a string of super-accurate shots, chipping dead on the par four 6th, playing a miracle shot out of the rough on the 8th to within 2ft of the pin, rifling a superb three-wood onto the green of the par five 14th and almost holing that tee shot on the 16th.
I was getting a bit irritated with my golf a couple of months ago because I felt I wasnt getting anywhere with it. But now I know I can do it! Its just a case of believing in yourself, she said.
Lucy was supported by her boyfriend and fellow Birmingham University golf team payer, Andy Smedley, who caddied for her all week. She was also watched by her parents, Sarah and David, who was a Tour player for 17 years and is now a tournament director and rules referee on the European Tour.
Although golf has always been a part of the Williams household, Lucy didnt take up the game until she was 14. I wasnt interested at all and then I got hooked! she said. Now she moves on to next weeks British strokeplay championship.
Charlotte Dalton, 19, was also on fine form and fought tenaciously throughout the final and made few mistakes apart from a couple of three-putts.
I have loved every singly minute of it, if you get this far you have to enjoy it, said Charlotte, who plays at Ladbrook Park. I played well but I got Lucy on a very good day! She deserved to win playing like that.
The players put on a sparkling show for the spectators, with most holes won with birdies.
They halved the first four before Lucy edged ahead with a birdie two on the 5th and from then on she held the lead in the match.
The sixth was halved with birdies, then Lucy birdied the 8th to go two up. She lost the 10th with a rare bogey but came straight back with a birdie on the 11th, to re-establish her two-hole advantage.
Charlotte, in turn, won the 12th with a birdie two to again reduce the lead to one hole. However Lucy won the 13th with a par and, was conceded the long 14th which she reached in two. The players halved the 15th in par before Lucy clinched the victory on the 16th.
Lucy Williams (Mid-Herts) beat Charlotte Dalton (Ladbrook Park) 4/2