Pereira was so tired by the end of the second round he retired to the wrong corner heading into the final round.
While his first two rounds would have had UFC boss Dana White licking his lips, Pereira was quickly forgotten by the third round when Connelly dragged him to the mat and sent down a flurry of punches.
Pereira was gassed and had nothing left in the tank as Connelly, who accepted the bout on just five days' notice, executed a savage ground and pound that saw the judges' hand him a unanimous decision victory (29-28, 29-27, 29-27).
Pereira began the fight with an ambitious flying punch off the cage before chasing down Connelly and performing a cartwheel and backflip.
Completely missing his opponent with the backflip-cum-headkick, the Brazilian then ran up the side of the cage before chasing after his Canadian foe.
Before round one was out, and not short of spectacularly bizarre and creative attacks, Pereira chucked in a few flying knees, somersault kicks and another backflip as Connelly laid on the deck.
But after running out of gymnastics moves to use in the cage Pereira was also running out of breath by round two, The Sun reports.
Connelly, preferring to use more traditional and effective MMA tactics, forced his man on to the backfoot and sunk in some hooks over the top.
By round three Pereira could do nothing but defend as he was taken to the ground and marginally escaped two guillotine attempts by the resilient underdog.
A late ground and pound attack by Connelly secured the humbling shock win and landed him a $100,000 Fight of The Night bonus.
He also won a fair chunk of Pereira's fight purse after the Brazilian failed to make weight and forfeited 20 per cent of his pay.
Connelly said after the fight he was thrilled to record the win against such an overly-flashy opponent.
"He's super-exciting. He likes to throw the rolling thunder, the front-flip kick. It's called the rolling thunder – I got to steal his thunder tonight," he said, according to MMA Junkie.
"I knew I wasn't going to do any show like him. I'm a fighter.
"Like I said in a couple interviews beforehand, if doing backflips was what I believed important in fighting, I'd be great at backflips, but I couldn't do one to save my life. I practice punching people, choking people and kicking people because that's what seems to work in most of the fights I watch."
Meanwhile, Justin Gaethje once again proved he is the real deal inside the Octagon after a devastating finish in the main event at UFC Vancouver.
In his fight against journeyman Donald "Cowboy" Cerrone, Gaethje got the job done in the opening round with a hellacious right hand that landed flush on Cerrone's chin.
