Olympic icon Dawn Fraser was highly emotional at the Australian Swimming Trials in Adelaide on Thursday night - and given the scintillating performance of her goddaughter Lani Pallister in the 800m freestyle final, she had every reason to be.

In a touching moment, Fraser - who famously won gold in the 100m freestyle at three successive Summer Games between 1956 and 1964 - was seen poolside embracing Pallister after she created her own slice of sporting history.

On the fourth day of competition, Pallister, 23, smashed Ariarne Titmus's Australian women's 800m freestyle record which she set at last year's Paris Olympics. 

Pallister's slick time of 8:10.64 was also five seconds under her previous personal best - and the third-fastest swim of the year globally over the distance.

American superstar Katie Ledecky (8:04.12) and Canadian teenager Summer McIntosh (8:05.07) are the two swimmers Pallister is chasing. 

'I'm pretty happy with that time,' she said post race.

It comes after Pallister earlier this year moved to the famed St Peters squad in Queensland under Titmus's coach, Dean Boxall.

She was previously trained by her mother Janelle Elford.

Meanwhile, Fraser, 87, recently revealed she lost 22kg following a fall on her driveway in December last year - and that she could have died following subsequent surgery.

'The pain was excruciating,' she told News Corp when reflecting on the incident at her Noosa home on Queensland's Sunshine Coast.

'I'd never felt pain like that before. I've never sort of fallen or broken anything in my life and it was a shock to me.'

And the cause of the fall? Fraser was trying to open a case of soft drink when she slipped on a small ledge and fell onto hard concrete.

Fraser's hospital X-rays were grim - they revealed a broken hip, four cracked ribs and potential internal bleeding.

Given her age, the anaesthetist warned 'Dawny' she may not survive the operation.

'When the anaesthetist came in and said I could die, that was frightening,' she said. 

'I didn’t want to die that way, so that put my will up to come out of it.'