Walsh broke his own resident record with 21.11m in his third and best put at the Caledonian Ground, which handed him his seventh consecutive national title.
The 24-year-old set the previous mark (20.91m) at the Auckland Track Challenge last week, only two weeks after Gill set the mark at 20.83m in Christchurch.
It was also the first time he had cracked 21m on home soil, a feat he repeated with his sixth and final put (21m) of the competition.
Walsh's winning effort came just moments after Gill took the lead with a 20.22m put on his third attempt.
The 21-year-old Aucklander improved his final mark to 20.23m with his fifth attempt.
It was the first time the pair had met this season, after injuries ruled both out of previous competitions.
‘‘We dodged each other there for a little bit,'' Walsh said.‘‘I was scared of him to start with and maybe he was scared of me the second time.
‘‘It was good for us to line up today and put on a good show for the nationals. Without Jacko around, I wouldn't be throwing as far as I am.''
Gill opened the competition with a 19.06m put, before Walsh followed it up with a 20.13m effort.
The Aucklander's second attempt (19.71m) was originally called a foul for stepping out the front, only for Gill to successfully challenge the call.
Gill then hit the front with his 20.22m put, only for Walsh to wow the large, vocal crowd with his new resident record. Walsh, who missed the Big Shot last month with a hip injury, said he still was not 100% fit.
‘‘It's feeling better and better every day. It's still not 100%; it's probably 97%. It depends on the day and how I warm up. I'm starting to feel a little bit old.
‘‘Things are hurting that shouldn't be hurting. But that's life; I'm pretty happy with where it's at.''
Organisers came to the party by allowing fans to stand on the track, giving them a first-class view of the action.
While both athletes were supported, it was Walsh who most fans were rooting for, and they even willed him on with a slow clap before one of his attempts.
His winner and record-breaker produced the loudest cheer of all, and Walsh gleefully lapped up the support of the crowd.
‘‘Well, I was throwing against an Aucklander; they aren't going to cheer them on,'' Walsh said when asked about the crowd.
‘‘It was great just to get the people behind me ... It was pretty cool to have them right next to the track.''
Yesterday was the last time the national record-holder (21.62m) will compete on home soil this season. Soon after collecting his medal, he flew to Australia for the Melbourne World Challenge today.
He will then spend a week at home in Christchurch before going to the world indoor championships in Portland later this month.
Gill, who opted to return to Auckland to train instead of going to Melbourne, said he was hoping to get closer to 21m.
‘‘I wanted to do a bit better than [20.23m]. There was that big throw there, but it didn't quite come out today. I was quite consistent, but didn't get that one that popped out further.''
Gill, who is still adjusting to competing in the senior grade, said his decision not to compete in Melbourne was to avoid overdoing it too soon.
‘‘I don't really like competing too much. I want to stay hungry and start training. Tom is at that top level, I have still got a little way to go. I'm just trying to build up and get a bit better and get to his level first.''
Walsh and Gill, who have both qualified for Rio, will next clash at the world indoor championships on March 18.
