The last version of your manuscript before submission to agents, editors, or publication.
The final draft is the polished, complete version of your manuscript that you're ready to send into the world. By this stage, structural problems have been resolved, character arcs are solid, prose has been tightened, and copy-level issues like grammar and punctuation have been cleaned up. It's not perfect (no draft ever is), but it represents the best work you're capable of right now.
Agents, editors, and readers form their impression of you based on what you put in front of them. A manuscript that's one draft short of ready will feel "almost there" in a way that invites rejection. The final draft is where you prove you can finish what you started and present it professionally.
If you haven't addressed feedback from beta readers or done a proper copy edit, it's not your final draft yet. Be honest about whether you've actually done the work or just want to be done.
Perfectionism disguised as revision will keep you from ever submitting. Set clear criteria for what "done" means, and stop when you hit them. At some point, further tinkering creates diminishing returns.
A story can be structurally brilliant and still get rejected because of sloppy typos and formatting errors. Always do at least one final proofread pass, ideally on paper or a different device.
A final draft should follow standard manuscript formatting: 12-point Times New Roman, double-spaced, one-inch margins. Check each agent's specific submission guidelines as well.
Take the most polished piece of writing you have and run it through a final-draft checklist: read it aloud for awkward phrasing, search for your known crutch words, verify all character and place names are consistent, and check formatting against standard manuscript guidelines. Track how many issues you find in a piece you thought was finished.