The Matildas had gone into the match looking to build on their opening 1-0 success over the Republic of Ireland.
And when they took a 45th minute lead through Emily Van Egmond it looked like they were set fair another three points.
Nigeria however summoned up a stunning response to shock the hosts and silence the majority of a packed crowd in Brisbane.
The Super Falcons hit back almost instantly in first half injury time to draw level through Uchenna Kanu’s instinctive strike.
And though the Australians continued to dominate possession and territory, the Nigerian struck twice more after the restart to take the game away from the Matildas.
The introduction of Barcelona star Asisat Oshoala gave added impetus to Nigeria and her presence proved crucial in the build up to Osinachi Ohale’s’s 65th minute header from a corner which powered the Super Falcons ahead.
It then went from bad to worse for the Australians on 72 minutes when Oshoala struck to extend Nigeria’s lead.
A mix up between Kennedy and goalkeeper McKenzie Arnold as the defender attempted to head clear saw Oshoala presented with the opportunity to fire home into an unguarded net.
With the hosts in need of urgent inspiration, Kennedy was summoned up front for the final 15 minutes to try and fashion a response.
And deep into 11 minutes of added time the City central defender used her height and power to head home from 15 yards to provide the hosts with a sliver of hope.
However, the Nigerians held on to secure the three points and set up a mouthwatering group finale with Nigeria, Canada and Australia all fighting for the top two positions to go into the last 16.
City’s Mary Fowler was an unused substitute.
Nigeria and Canada both have four points from two games with Australia on three.
Canada and Australia meet in their final group game with Nigeria pitted against Ireland.
Both games take place at 11.00 BST on Monday, July 31.
