Taking over the car in the effective lead after two strong stints from Stanaway, Waters eventually beat home the Scott McLaughlin/Alex Premat Shell Ford by 0.7 seconds.
“I don’t know what to say, I’m so pumped. I didn’t think I was going to keep him off,” said Waters.
“Scotty, I don’t know if he used his tyre up in that last stint a bit, but I managed to hold the gap and we won.
“I’m so pumped for the guys, they’ve put massive hours in, pushing the upgrades through. [Stanaway] did a bloody mega job, got me the lead and I managed to hold onto it.”
Chaz Mostert/Steve Owen completed a Ford sweep of the podium as tyre failures hit the two Red Bull Holdens.
Garth Tander/James Golding finished as the top Commodore runners in fourth after a last-lap pass on the second Shell Falcon of Fabian Coulthard/Tony D’Alberto.
Jamie Whincup/Paul Dumbrell recovered from a right-rear puncture to finish sixth, but Whincup now faces an 84 point deficit to McLaughlin in the championship ahead of the Supercheap Auto Bathurst 1000.
For the second year in a row, the Sandown classic was red-flagged following a heavy crash at Turn 6 on the opening lap.
Taz Douglas’ race ended when he sailed into the barriers after a suspected puncture caused by contact with Ash Walsh that spun the Brad Jones entry two corners earlier.
Repairs to the tyre wall meant the race was paused for more than an hour, ensuring a time-certain finish that eventually led to just 125 of the scheduled 161 laps being completed.
Stanaway had made the most of pole position to lead the early laps, holding top spot until making his first stop on lap 20.
Dumbrell pitted with the Kiwi and leapfrogged the Monster Ford, holding the advantage until the Red Bull Holden was hit by a right-rear tyre failure on lap 35.
Dropping more than a minute from the lead, Dumbrell’s demise handed the ascendancy back to Stanaway, who showed the way until handing over to Waters once his minimum 54 laps were completed.
Premat put in two clean opening stints to be less than 3s behind Stanaway when the driver changes occurred, putting McLaughlin well in the contest.
McLaughlin closed onto the back of Waters by the time the Monster Ford pitted for a third and final time on lap 87.
The Shell Falcon was in a lap later but, held up slightly by Rick Kelly’s Nissan, returned to the track once again 3s adrift.
McLaughlin was unable to do anything about Waters over the final 40 minutes, however, settling for second place.
Shane van Gisbergen had been holding out Mostert for third when he had a front-right tyre failure on lap 106, sending him off the road and resulting in an eventual 16th place finish.
Red Bull had earlier elected to start van Gisbergen and Craig Lowndes due to their lowly grid positions – the only primary drivers to line up for the first stint.
Van Gisbergen charged from 21st to 13th on the opening lap alone and managed to take the lead from Premat by the end of his first stint.
Although that put the Red Bull entry in contention, Campbell then faced a double-stint, the second of which came against the primary drivers.
The Porsche star ran third throughout his second stint but, predictably, lost ground to Waters and McLaughlin, leaving van Gisbergen with an 11s deficit when he returned and he ultimately was fending off Mostert rather than pressuring the lead duo when the tyre failed.
GRM’s joy at seeing Tander steal fourth was backed up by a strong seventh for James Moffat/Richard Muscat.
Lee Holdsworth and Karl Reindler were an equally impressive eighth despite a loose drivers’ window late in the race, which Holdsworth was able to punch out in order to avoid a black flag.
Tim Slade and Walsh finished ninth despite their opening lap drama, but finished the race with uncertainty hanging over whether they had breached the driver time regulations.
Mark Winterbottom/Dean Canto completed the top 10 after Canto had also been turned around on a frantic opening lap.
Rick Kelly/David Wall ended up as the top Nissan in 15th on a horror day for the factory squad.
Mobil 1 HSV Racing also failed to see the top 10, with James Courtney/Jack Perkins 11th and Scott Pye/Warren Luff 22nd after spending time in the garage with a throttle issue.