Hunter joins former grand slam singles champion Samantha Stosur as only the second Australian to claim the honour, with Rennae Stubbs also rising to No.1 in doubles without accomplishing the year-ending feat.
Hunter and her Belgian partner Elise Mertens topped their group unbeaten after winning all three of their round-robin matches in Cancun.
But they lost their semi-final 3-6 6-3 10-5 in a match tiebreaker to Russian Vera Zvonareva and German Laura Siegemund at the rain-marred showpiece on Monday (AEDT).
Zvonareva and Siegemund earlier upset American top seeds Coco Gauff and Jessica Pegula 6-3 4-6 10-8 to advance to the semis.
Defeat for Gauff and Pegula, the current co-No.1s, clinched the top ranking for Hunter.
Storm Hunter missed out on reaching the WTA Finals decider, beaten in a semi-final match tiebreaker.
Winning the elite season-ending crown would have added the cherry on top for the 29-year-old Queenslander.
Either way, she has still enjoyed a golden 2023 campaign.
Hunter has already won WTA titles in Rome and Guadalajara and made the Wimbledon decider, all with Mertens.
She also reached finals in Adelaide with Katerina Siniakova and in Birmingham with Alycia Parks.
A mixed US Open champion last year with fellow Australian John Peers, Hunter's success hasn't been limited to doubles, though.
The classy southpaw also qualified for the main-draw singles at the French Open and Wimbledon and was Australia's only woman to progress to the second round at Roland Garros.
While Hunter has bowed out, compatriot Ellen Perez is through to the final in Cancun with American Nicole Melichar-Martinez.
Perez and Melichar-Martinez outlasted Canadian Gabriela Dabrowski and New Zealand's Erin Routliffe 6-1 6-7 (1-7) 10-6 in a match tiebreaker in the first semi-final.
In a wild schedule, Zvonareva and Siegemund will be playing their third match in a day when they take on Perez and Melichar-Martinez in the decider.
Officials were forced to cram in the matches so players - including Hunter and Perez - could make a mad dash across the globe for this week's Billie Jean King Cup finals in Spain.
But with Australia playing Slovenia on Tuesday, Hunter and especially Perez remain in doubt for the group stage opener.
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