Turning out as the lone SA representative, Semenya enjoyed a gun-to-tape victory, completing the race in 1:21.77.
She obliterated the previous world best of 1:22.63, which had been clocked by Cuban athlete Ana Quirot in 1991.
Semenya, who took nearly four seconds off her own SA best of 1:25.56, which had stood for more than five years, was well clear of Ajee Wilson of the USA, who ended second in 1:22.39.
READ MORE: Caster Semenya cruises into 800m final
The ninth and final leg of the World Challenge series is set to be held in Zagreb, Croatia, on Tuesday.
“It’s been a beautiful and eventful long season for a dedicated athlete and we congratulate Caster for being part of the current breed of South African athletes leading in flying the national flag high around the world.
“We are proud of her, her coach and the rest of her support staff for the great work done to make her perform the way she has over the two seasons, including at the Olympic Games in Rio last year and the IAAF World Championships,” said Aleck Skhosana, the President of Athletics South Africa.
– African News Agency