Australian Cole touched home in 1:02.77, an Oceania record, to finish 0.68 seconds ahead of South African Du Toit, 28, who brought the curtain down on her career with 13 Paralympic titles over three Games, having also appeared in non-disabled events at both the Olympics and Commonwealth Games.
Spain's Sarai Gascon claimed bronze in a time of 1:03.62.
Du Toit said: 'It's all over. I went out there and tried my best. I now walk away from the sport. To get second is a little disappointing.
'Two months ago I wasn't going to come [to the Paralympics]. It's been a tough couple of months. I look back and realise I gave everything in the pool and gave everything as a person, it's time to move on. I've no idea what's next.'
Cole added: 'I actually feel really bad about beating Natalie. I know I should feel really stoked, but it was her last race and I did want her to do really well.'
Cole's fellow Australian Matthew Cowdrey won his 13th Paralympic gold with victory in the corresponding men's event.
The 23-year-old finished in 55.84, signing off his campaign in style after a Games in which he has become his country's most decorated Paralympian.
Meanwhile, Bradley Snyder of the USA won his second gold of London 2012, a year to the day after being blinded by an improvised explosive device while serving with the US Navy in Afghanistan.
'It is an emotional day, but it's kind of a day of celebration,' said Snyder after winning 400m Freestyle - S11 gold in 4:32.41.
'I zeroed my focus on performance and was able to put a lot of the emotions away. The last year's been really crazy and this was kind of a whim, a dream back in February, and for it to come to fruition is very, very exciting.'
The pool has been a place where Snyder can thrive and he intends to continue to push his ability.
'To be able to feel good, if not great at something, it gives you an immeasurable amount of confidence in all the other aspects of life that I'm struggling with,' he added.
'I went a 4:16 or so with my sight. We're knocking on the door. Maybe in another year or two we'll be able to eclipse those times - at least that's a great goal to strive for.'
Elsewhere, Daniela Schulte of Germany won the women's 400m Freestyle - S11 and China's Xu Qing took men's 50m Butterfly - S6 gold.
Ukranian Oksana Khrul won the corresponding women's event, before Yang Yang brought up another Chinese success in the men's 50m Freestyle - S2.
There was more success for the Asian powerhouse with victory for Xia Jiangbo in the women's 50m Freestyle - S3, while Daniel Dias won the men's 50m Butterfly - S5, Sarah Louise Rung of Norway won the women's equivalent and Maksym Veraksa won the men's 50m Freestyle - S12.
Russian Oxana Savchenko claimed the women's 50m Freestyle - S12 title before Ihar Boki of Belarus took the men's 200m Individual Medley - SM13 title and Valerie Grand-Maison of Canada took the crown in the women's event.
The final race of the night proved to be one of the most dramatic of the entire meet, as Australia took gold in a blanket finish to the women's 4 x 100m Medley Relay - 34 points.
Chased down by three other swimmers on the final leg, the Australians just touched ahead in 4:53.95, just 0.03 ahead of Great Britain in silver. The USA took bronze a further 0.15 back, with Russia just edged out in fourth in 4:54.36.
Related content
- Athletes
AUS
ESP
CHN
UKR
CHN
CHN
BRA
BLR
- Countries


