The Price of Salt (New York: W.W. Norton, 1990), originally published under the pseudonym "Clare Morgan." I'd read recently that it was noted for being one of the first works of lesbian fiction with a happy ending so I thought "why not!" and ordered it interlibrary loan from our local public library.
Romance? Well, yes. Happy ending? .... Not so much. I mean, okay, technically, yes, the two main characters end up together. So if your definition of "happy" is "two characters of the same gender/sex choose their relationship despite social prejudice and do not end up in mental institutions and/or dead" then this fits the bill. If your definition of "happy" is "two people who actually love each other establish a mutually fulfilling relationship" then ... not so much.
The plot in a paragraph: Therese, an emotionally-starved young woman in her twenties, is living in New York City and working at a department store while trying to break into the theater industry as a set designer. She rather listlessly dating a man who assumes that since they've had sex they will eventually get married. One day at the department store Therese assists Carol, an affluent suburban housewife who is there to purchase a Christmas present for her daughter. Captivated by Carol's presence, Therese can't get the woman out of her mind. She sends Carol a Christmas card and when Carol receives it, she phones Therese to thank her. The two women slowly begin seeing more and more of each other until they decide to take off on a cross-country road trip while Carol's soon-to-be-ex-husband has their daughter for three months. During the roadtrip the two women finally have sex (and pretty nice, if not very graphic, sex, actually ... they're relationship is most loving when they're in bed). The husband has hired a private investigator to follow the two women and gather evidence of the affair to use against Carol in the divorce proceedings (to try and gain full custody of the daughter; in 1954 a completely realistic situation for women in same-sex relationships). Carol leave Therese to return to New York and try to fight for her visitation rights; when this fails she ends up returning to Therese and asking to resume their relationship. Therese initially refuses, but the novel ends with Therese being drawn back to Carol. We're clearly meant to celebrate that Carol prioritized Therese over visitation rights with her daughter (her lesbian "record" precluded actual custody) and that Therese is not left alone, or left feeling her lesbianism is somehow dirty or unsuccessful.
The positive: So the obvious positive here is that this is a novel in which a sexual relationship between two women is central to the plot and, in the end, central to the lives of the two women involved. They defy the pressures of a world in which Therese is expected to marry the man with whom she's had (supremely unsatisfying) sex. A world in which Carol is expected to capitulate to the demands of her husband's family (essentially that she act straight for the rest of her life) in order to see her daughter -- even in highly supervised annual visitations. The novel situates these women as heroines, and their enduring relationship as a triumph. It also doesn't shie away from the fact that their relationship is sexual -- as I said above, the scene in which Therese and Carol make love for the first time is tame and "off stage" by fanfic standards, but sweet all the same. Since a number of the "lesbian classics" I've read fall down in this regard (satisfying sex scenes) this is a definitely plus.
The negatives: The overarching "negative" from my perspective is that the question remains throughout the whole damn novel why Therese wants to be with Carol. Her infatuation with Carol is understandable at first as a revelation -- an understanding that the way she feels drawn to Carol is wholly different from desire of the platonic sort. It provides her with some pretty clear insight into why her relationship with the boyfriend has been unsatisfying. The trouble is that Carol is manuipulative, withholding, and cruel. She entertains Therese when it's convenient and amusing for her to do so, but drops her the minute something else catches her attention. She makes fun of Therese's set designs and aspirations in the theater. When she returns to Therese after months of estrangement she basically assumes Therese will take her back no questions asked, and is hurt when this isn't (initially) the case. Carol is at the center of her own personal drama and Therese is just part of the supporting cast.
Also, there was a friend of Carol's (whose name I'm currently blanking on) who plays intermediary between Carol and Therese and is also clearly jealous of Therese's intimacy with Carol. There's clear intimations that the two of them were involved at some point and I kept waiting for the revelation that they were still involved behind Therese's back. I bet you anything they were.
I was definitely left hoping, at the end of the novel, that a year or two down the road Therese -- with a bit of sexual experience behind her and a more solid sense of herself as an artist and as a queer woman -- would get over her obsession with Carol and find someone who, you know, actually showed some affection for her. Who loved and enjoyed Therese for Therese's sake, rather than just as a plaything.