Wallace played one of the shots of the week at the first play-off hole to eliminate Johnston and claim his second European Tour title.
The pair found themselves locked at 11-under after a thrilling Sunday roller coaster ride on a course which has received more than its fair share of criticism.
But heading down the par-5 18th for the first hole of sudden death Wallace produced a second shot that will live in the memory banks for years, a long iron across water to a dangerous pin that settled 10 feet from the hole and put the title beyond doubt.
Johnston, who laid up on the hole, hit a good third shot but his birdie effort caught the lip and spun out leaving his fellow Englishman two putts for the win.
“Ever since being three over through eight at the start of the week I've played some of the best golf of my life,” Wallace said in the aftermath.
“And to do it in that style at the end there capped it off. I hit some really good shots and that play-off: I pumped it down there on the last and it went a long way and then a four iron went even further than I thought it would so I was jacked up a bit.
“To hit two shots like that is exactly why I play the game. Beef's putt on the last should have gone in and it's just my day today."
Johnston shot the round of the day Sunday to force sudden death, his 6-under 66 one of just six scores under 70.
While disappointed with the end result the popular Englishman was pleased with his week after a difficult 2017.
"It’s alright,” he said. “I had a very good week.”
"Last year was tough. This year’s start has been good so I've just got to keep pushing on and keep working hard.
“I’m slightly frustrated (with his birdie attempt in the play-off) as I attempted a similar putt on the 18th during regulation play. I didn’t think it broke that much and I hit a good putt but it didn’t go in.”
The day was disappointing for local hero Shubhankar Sharma who ran out of energy, and luck, after a hectic fortnight of golf.
The 21-year-old was the talk of the golf world after leading through 54 holes of the WGC Mexico Championship as a virtual unknown and held a share of top spot heading to Sunday again.
But despite strong local support it was not to be his day as two front nine double bogeys offset three birdies to see him to the turn 1-over.
His day was summed up by the 13th hole where a laser-like second shot hit the hole but ricocheted well off the green and he was unable to get up and down to save par.
Sharma was one of 15 players to finish in red figures for the week, his 3-over 75 good for a 4-under total and T7.
Wade Ormsby was the best of the Australians at 3-over and T25 ahead of Jason Scrivener at 7-over and T40.
David Gleeson finished the week 12-over and T53 while Marcus Fraser succumbed to the quirky DLF layout with a final round 81 to drop 18 places on the leaderboard to T60.
SIGNATURE HOLES - 5TH AT SOUTHERN GC VICTORIA:
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