The marathon encounter, including a three-hour final set, eclipsed the previous mark of 4hr 19min set by Barbora Zahlavova Strycova and Regina Kulikova in Melbourne last year.
The match was full of drama as it swung first one way and then the other as the two women produced some outstanding tennis in front of an enthralled crowd at Melbourne Park's Hisense Arena.
With neither player willing to give it took a moment of extraordinary athleticism to force the issue, which came at 14-14 in the third set when Schiavone pulled off a superb volley to make the decisive break.
She came out to serve for the match for a third time and despite going down 0-30, she held her nerve and clinched a famous victory with a forehand volley on her third match point.
The 30-year-old reigning French Open champion raised her arms in triumph and can look forward to a quarter-final showdown against top seed Caroline Wozniacki.