In the main event of UFC 293, American Strickland stunned hot favourite Adesanya to win the 185-pound belt with an unanimous decision (49-46, 49-46, 49-46) to prevail in a five-round slugfest.
At the sold-out Qudos Bank Arena, Strickland landed several stinging punches to the head and had Adesanya on the back foot throughout.
"Never in a million years did I think I would be here," said Strickland, who inflicted New Zealander Adesanya's third defeat from 27 fights.
"I thought I would be walking away a little broken up. I'm a little shocked that didn't happen.
"This is the first time I'm lost for words.”
Strickland, who caused controversy ahead of the fight with misogynistic comments about putting women back in the kitchen, agreed to fight on late notice after Adesanya's South African rival Dricus du Plessis was unavailable.
Fifth-ranked Strickland earned his title shot after wins over Abus Magomedov and Nassourdine Imavov.
In the first UFC fight held in Sydney since 2017, both fighters felt each other out initially amid a febrile atmosphere.
The 32-year-old attempted to play to his strengths of wrestling and striking from close range in a bid to produce a major upset.
He made his move late in the first round after connecting with a powerful right-hand punch that felled Adesanya.
After surviving Strickland's flurry, Adesanya regrouped in the second round and utilised his favoured kicks to deadly effect.
Adesanya threatened to take control in round three before Strickland landed a left hook as the fight went the distance.
Strickland (28-5) was unrelenting and trash-talked a bloodied Adesanya, a former kickboxer considered the marquee fighter in mixed martial arts, in the waning seconds with a shock title secured.
Alexander Volkov silences crowd
Also on the main card, towering two-metre (six foot seven inches) Alexander Volkov silenced the rowdy fans after defeating Australian Tai Tuivasa by submission in the heavyweight fight.
With a five-inch height advantage, Russian Volkov confirmed his favouritism by submitting Tuivasa with an Ezekiel choke in the second round, pinning his opponent to the ground with his right arm around the neck.
"(He took) so many punches and he was still on his legs, this guy is very tough," said 34-year-old Volkov, who won by submission for the first time since 2016.
In the other heavyweight bout, New Zealander Justin Tafa knocked out American Austen Lane in the first round after landing a left hook flush on the chin.
It was the second UFC event in Australia this year after lightweight champion Islam Makhachev overcame local Alexander Volkanovski at Perth Arena in February.