Budd (10-2) finished Coenen with strikes on the ground at the 2:42 mark of the fourth round. The featherweight title fight headlined Bellator 174 at Winstar Casino in Thackerville, Oklahoma.
Coenen (23-7), of Netherlands, announced her retirement immediately after. It marks the end of a 16-year career, which included notable fights against Miesha Tate, Sarah Kaufman and two meetings with Cris "Cyborg" Justino.
The submission specialist will go down as a pioneer in female MMA, but Friday belonged to Budd. The 33-year-old featherweight took Coenen down early in each round and was never really threatened by her ground game.
The rounds grew increasingly one-sided as the fight progressed, with Budd moving to mount in the fourth and dropping elbows and hammerfists until referee John McCarthy intervened for a TKO finish.
Budd, of British Columbia, has won eight in a row. Her last loss came via armbar to former UFC bantamweight champion Ronda Rousey in 2011. She holds a win over current UFC featherweight champion Germaine de Randamie from 2011.