Johnson scored 20 points and Dayton denied last year's national champs another title, beating North Carolina 79-68 Thursday night to win its first NIT crown in 42 years.
With officials discussing expanding the NCAA tournament to 96 teams as soon as next year, this could be the final National Invitation Tournament, an event with a rich history that dates to 1938.
"Might be a fitting way to end it, for us to win it," Dayton coach Brian Gregory said. "Our national brand, in a lot of ways, was built right here in Madison Square Garden."
Indeed, the Flyers have been a regular participant in the NIT. This was their 22nd appearance, second only to St. John's (27). Dayton also won in 1962 and '68.
NCAA vice president Greg Shaheen said Thursday no decision has been made about the future of the postseason NIT, which is operated independently by the NCAA.
Relying on depth, defense and some clutch 3-point shooting, the Flyers answered every North Carolina surge in the second half and handed the Tar Heels one more disheartening loss at the end of a lousy season.
After it was over, Dayton players danced at midcourt and then lingered on ladders as they cut down the nets.
Forgive them for taking a little extra time to soak it all in. They're not as accustomed to trophy ceremonies as the powerhouse program they had just beaten.
"This was the hardest year I've ever had coaching, there's no question about that. I didn't do a very good job with this team," Tar Heels coach Roy Williams said. "I love this run because it showed the effort and resolve and positive things that happen, and I think that was extremely important to me. So, from that viewpoint, I'm going to appreciate what we learned from it."
Reserve guard Paul Williams added 16 points for No. 3 seed Dayton (25-12), which bounced back from a disappointing regular season of its own.
Picked to win the Atlantic 10 Conference, the athletic and experienced Flyers faded late and missed the NCAAs before turning things around to finish on a high note.
"We struggled through the season. But being in the NIT, we stayed positive and we showed we have heart and character," said Chris Johnson, selected the tournament's most outstanding player. "It shows today that we are a good team. We just won a championship."
Will Graves shot North Carolina back into the game in the second half, finishing with seven 3-pointers and 25 points for the fourth-seeded Tar Heels (20-17), who started the season hoping for back-to-back NCAA titles.
Chris Wright had 14 points for the Flyers, as did Chris Johnson - who scored 22 in a semifinal victory over Mississippi.
Including the Rebels and Tar Heels, Dayton beat four teams from BCS conferences en route to the championship. Cincinnati and Illinois were the others.
"This game kind of is a capsule of our season," Gregory said. "Started off great, had some tough times and then just kind of fight through, and ended up very successful at the end."
The Tar Heels fell short in their attempt to grab a somewhat dubious piece of college basketball history. A victory Thursday night would have made them the first team to follow up an NCAA national championship with an NIT title the next year.
"It's been an unusual year for North Carolina basketball," Roy Williams said, his eyes red and puffy as he spoke about his seniors. "I've lived a charmed life in the past, and this has been a little tougher. I'm so proud of our guys for coming to play in this National Invitation Tournament and playing so well up until today and getting us to this point. We just didn't finish the job."