Using a large-acceptance germanium detector array (Hyperball), we have observed a spin-flip M1 gamma transition between the ground-state spin doublet of (7)(Lambda)Li (3/2(+)-->1/2(+)). The observed energy of 691.7+/-0.6(stat)+/-1.0(syst) keV provides crucial information on the strength of the spin-spin interaction between a Lambda and a nucleon. This is the first observation of well-identified hypernuclear gamma transitions using germanium detectors.