OAKVILLE, Ontario (REUTERS) - Jason Day spoiled Canadian hopes of a first home-grown winner in 61 years at the Canadian Open with a one-stroke victory on Sunday.

The 27-year-old Australian birdied the last three holes at Glen Abbey to triumph by one over American Bubba Watson and by two over Canadian David Hearn, the 54-hole leader.

Day rolled in a 12-foot putt for birdie on the par-four 17th to take the lead from Hearn at 16-under.

He then sealed the win in emphatic style by draining a 21-foot birdie putt on the 72nd hole for a closing four-under 68 and a winning total of 17-under 271.

It was his second PGA Tour win of the season, the fourth of his career and followed up a strong tie for fourth at last week's British Open.

He becomes the third Australian to win the event, joining Greg Norman (1984 and 1992) and Nathan Green (2009).

Two-time Masters champion Watson and crowd favourite Hearn, playing in the final pairing, shot 69 and 72, respectively.

Hearn held a one-stroke lead standing on the 16th tee but Day and Watson, who made birdie on five of his six closing holes, both charged past him with blazing finishes.

The 36-year-old Ontario-native just missed out becoming the first Canadian - since Pat Fletcher in 1954 - to win the national title in 61 years.

Watson had a chance to force a playoff on 18 but his eagle effort from just off the green on 18 missed left.