The Slovakian had barely featured among the lead riders throughout the 267.5-kilometre race in Bergen.
He was classified 80th approaching the final climb up Salmon Hill, but timed his ride to perfection.
Sagan held off Norwegian Alexander Kristoff in a sprint finish to become the first man to win three consecutive world crowns.
Frenchman Tony Gallopin attempted to break clear 13km from home, but he was swallowed up at the foot of Salmon Hill.
At the same time a crash accounted for several riders, before Italian Gianni Moscon and France's Julian Alaphilippe used the final climb to steal a march on the peloton.
With 4.3km left Alaphilippe made what appeared to be a decisive burst, but he was eventually chased down.
Sagan and Kristoff forced themselves to the head of the pack and crossed the finish line together with the 27-year-old winning by a hair's breadth.
"It was not easy, guys were changing in the front all the time," Sagan told the BBC.
"I tried to go with the breakaway and it came down to a sprint, it was unbelievable.
"Kristoff was racing at home so I'm sorry, but of course I'm happy to win. (Three in a row) is something special for sure. For me it's something very nice."
Australian Michael Matthews took third place with Italian Matteo Trentin fourth and a surprise fifth place for Britain's Ben Swift.
The 29-year-old from Rotherham said: "Sagan was incredible, I think all of us were trying a couple of moves because it was all over the place, but he did amazing.
"The team was brilliant today, we set out what we wanted to do and everyone rode brilliantly."
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