The 20-year-old world champion, who had already booked his London ticket by winning his favourite 100 metres freestyle event in a stunning 47.10 on Monday, found an extra gear to edge Olympic silver medallist Eamon Sullivan with a time of 21.74 seconds.
"I've ridden the high from the 100 free right to the end of the week and it's a great way to finish," Magnussen said in a poolside interview at the South Australia Aquatic and Leisure Centre.
"I think I can definitely get under the 47 (second) barrier in the 100 and I don't know what I can do in the 50."
Earlier in the trials, Magnussen had described the 50 freestyle as a "bit of fun" and an event to help him work on his speed for the 100. But he ended up smashing his personal best by more than half a second in the final, while setting the second fastest swim in the distance over the past year.
Only Brazilian Cesar Cielo's 21.52 to win gold at the world championships in Shanghai last year was faster over the period.
Sullivan was thrilled to qualify for the second individual berth for the Olympics as runner-up after enduring a horror run of injuries over the past three years, including five dislocated fingers, an abdominal tear and a fractured heel along with shoulder tendonitis and back pains.
"If you had have asked me three weeks ago if I was going to get an individual spot let alone get on the team I wouldn't have believed you," said 26-year-old Sullivan, who also qualified for a spot on the 100 freestyle relay team on Monday.
"It's been a really, really rough last three years so to come good for the last four days has been pretty important for me and I'm happy with the results."
Olympic silver medallist Geoff Huegill missed out on a third Olympics after finishing fifth in the final of the 100 butterfly.
The 33-year-old Huegill, who famously shed more than 40 kgs to return to the pool and win Commonwealth Games gold at Delhi in 2010, completed a hat-trick of failures for the former world champion men who came out of retirement to bid for London.
Five-times Olympic champion Ian Thorpe failed to qualify in both the 100 and 200 freestyle last week, while Michael Klim, who won a pair of relay golds at the Sydney 2000 Games, crashed out of the 100 butterfly semi-finals on Tuesday.
Winner Chris Wright and 18-year-old runner-up Jayden Hadler sealed the individual berths for the 100 butterfly at London.
World silver medallist Belinda Hocking edged Meagen Nay to win the 200 backstroke title, while Kylie Palmer, runner-up in the 200 freestyle at Shanghai, won the 800 freestyle.
Triple Olympic champion Libby Trickett, who will compete at a third Olympics after qualifying for the 100 freestyle relay team on Tuesday, set the third fastest time into the final of the 50 freestyle.
The 27-year-old will bid for a top two finish in the final to secure an individual berth for London when the meeting wraps up on Thursday.