Struggling and managerless Southend were seen off in reasonably comfortable style as Sam Ricketts’ men secured Town’s biggest victory on the road this term.
Top scorer Okenabirhie opened the scoring in style five minutes after the break with a deadly accurate finish in off the far post.
Waterfall’s towering header with a quarter of the game remaining put daylight between Shrewsbury and their near rivals in what was billed a crunch game at the bottom of League One.
The win, adding to away successes at AFC Wimbledon and Peterborough, takes Shrewsbury to 46 points - possibly a couple of positive results shy of the likely safety mark.
A fifth straight victory against the Blues also puts a four-point cushion between Town and the bottom four.
Town were professional and assured in the second period after getting their noses ahead. The first half was largely a non-event although Ricketts’ men edged it, neither side managed a shot on goal.
The limp Shrimpers, who sacked Chris Powell this week, did not manage a shot on target until the 81st minute - a week after they managed none at Peterborough.
It was undoubtedly the biggest result of Ricketts’ reign as his side climbed four places to 15th with the visit of another struggling and managerless side, Scunthorpe, next weekend.
The 312 travelling Salopians left Roots Hall in full voice after rare away day joy. The away fans have been put through the ringer this season but they enjoyed one of Town's most assured displays of the season as survival became a far more realistic prospect.
Jonathan Mitchell was drafted in between the sticks for his full Shrewsbury debut after joining on loan from Derby in January.
Town were dealt the significant blow in the week that No1 Steve Arnold was ruled out for the remainder of the season with a hamstring injury.
Ricketts made no other changes from the side that impressed in defeat in last week’s Meadow defeat to Portsmouth.
Shrews were hoping to have James Bolton (foot), Ollie Norburn (Achilees) and Okenabirhie (knee) available after injury scares and the trio made Ricketts’ starting XI.
The fixture was billed as a huge one in both clubs’ survival hopes as they lined up 20th and 19th before kick-off.
A winless run of 11 games proved enough for the Shrimpers to sack club legend Chris Powell earlier this week - Town were hoping to avoid the same curse laid on them by Rochdale a few weeks ago after Keith Hill was dismissed.
The hosts were overseen by long-serving academy boss Ricky Duncan.
Recent history was on Salop’s side, the visitors had won the last four against Southend. The 2-0 home win in September was Shrews’ first victory of this season.
There was a big-game atmosphere inside Roots Hall during the build-up, both sets of players needed no reminder the size of the encounter.
Greg Docherty showed no early sign of jitters, after 15 seconds he attempted an audacious effort from near the halfway line that caused keeper Nathan Bishop to backpeddle but it was comfortable.
Southend threatened a scurry forward but the visitors had the upper hand of the opening 15 minutes. Docherty, Okenabirhie and Scott Golbourne combined well in attacking areas with Shaun Whalley also searching for key passes.
Waterfall was inches from converting a Golbourne corner but it dropped wide of the back post.
The hosts would have been keen to work Mitchell in the early moments but the on-loan Rams shot-stopper had little to deal with. Dru Yearwood went down softly in the box looking for a penalty but referee Michael Salisbury was unmoved.
Town looked the better side with the ball. Whalley was proving a thorn in Southend’s side with several searching runs and passes.
Okenabirhie tested the Town goal and assistant referee’s flag twice quick succession, first stabbing wide from a good run and cross from Docherty before finding the woodwork via a Bishop save - flagged offside on both occasions.
The first half petered out as two teams low on confidence struggled to create meaningful attacks. The half ended with neither goalkeeper facing a shot to save.
Norburn’s afternoon in Essex lasted just 45 minutes as he was replaced at half-time by Josh Laurent with what is suspected recurrence of his injury.
An unremarkable start to the second period could have seen Town fall behind had Shrimpers skipper Rob Kiernan got better contact on a good corner delivery from the right.
Seconds later, after a Town break, it was Kiernan whose error was pounced on in style by Okenabirhie.
Anthony Grant's header alerted Okenabirhie, who was too quick for Kiernan, and poked it to Whalley before going for the return and making no mistake.
The top scorer punished the hosts. From the right side of the penalty area with a few yards of space to work in, he dispatched a low finish across Bishop and in off the far post.
Okenabirhie and his team-mates celebrated in front away fans perched behind the goal as Town made the game’s first shot on target count
It was the striker’s 15th goal of his first season back in the Football League and his first in 11 appearance since a treble at Bradford.
The goal lifted Town up from 18th to 15th in the standings.
The match continued its bitty trend after the opener. A number of whistles from man in the middle Michael Salisbury broke up play.
On the hour mark Shrewsbury’s goalscorer almost doubled his tally. A scrambled effort via a defensive deflection from James Bolton’s low cross found the post with Bishop nowhere near.
It wasn’t all one-way traffic and Town were still on their toes in their own defensive third. Beckles and Waterfall both put in crucial clearances as the Shrimpers sent crosses into the box.
But Salop gave themselves vital and very welcome breathing space with 20 minutes to go.
Whalley and Golbourne combined on the right side of the box and Town’s defender sent in a looped cross to the back post and up climbed Waterfall, now with the armband, to convert a bullet header.
It was the big defender’s sixth goal of the season and his most crucial to date - rediscovering the away day form that helped him convert a double at AFC Wimbledon in Town’s first win on the road this season.
Ricketts sent on Aaron Amadi-Holloway for the tiring Okenabirhie and the powerful striker held the ball up well and showed nice touches.
By the contrary Southend’s substitutions were not having an impact on the game as the hosts’ heads continued to drop.
Such was the frustrations at Roots Hall, the home crowd let off a huge ironic cheer as Simon Cox finally tested Mitchell with an angled strike. It was their first effort on goal in almost two entire matches.
The frustrations boiled on to the pitch at one point as Whalley dived in the box under little pressure, causing an angry reaction from Shrimpers fans, with the busy Laurent also getting involved.
Laurent fired wide across goal after a neat run from Amadi-Holloway’s cute pass as Shrews could have scored another. Former Shrimper Grant almost netted an emotional goal at his former employers, where he is well remembered, but shot wide.
But Town were looking composed and comfortable. Jason Demetriou did provide a late scare but, after some neat skill, somehow blasted wide.
For a side unfamiliar with wins on the road, Salop were worthy of their two-goal lead.
The crucial three points in Essex came at a vital time for Ricketts’ men who, against opposition low on confidence and without a management figure, were ruthless in the second period where they upped their game and took a giant step towards safety.
A home win against struggling Scunthorpe next week will see Salop almost over the line as they show signs of life in this tightest of relegation battles.
Southend United (4-4-2):
Bishop; Demetriou, Kiernan ©, White, Hart; Bunn (Kelman, 66), Yearwood (Hyam, 66), Dieng, Kightly; Cox, Acquah
Subs not used: Oxley (gk), Bwomono, Turner, Mantom, Hutchinson.
Shrewsbury Town (3-4-2-1):
Mitchell; Williams, Waterfall, Beckles; Bolton, Grant, Norburn (Laurent, 45), Golbourne; Docherty, Whalley (Edwards, 79); Okenabirhie (Amadi-Holloway, 73).
Subs not used: Charles-Cook (gk), Sadler, Campbell, Payne.
Referee: Michael Salisbury
Attendance: 6,818 (312 Shrewsbury fans)
Position in the table: 15th (46 points from 40 games)
Star man: Luke Waterfall - Goal and defended well in clean sheet