Kelly was bogey-free and had a two-shot lead on the back nine at Prestonwood Country Club until he failed to birdie the par-5 17th, then three-putted from 40 feet on the 18th, sending his first putt some 10 feet by the hole.
He carded a five-under 67 in the final round on Sunday (Monday AEDT) to finish at 13-under 203 and was preparing for a playoff when Harrington, who started the final round with a three-shot lead, hit a superb pitch to set up birdie on the 17th.
They were tied for the lead until Harrington went long on the 18th from the fairway, chipped about eight feet past, then lipped out the par putt. The Irishman shot 71 in the final round.
Kelly won for the 12th time on the 50-and-older circuit, and the first time since the Shaw Charity Classic in August 2022. He had spent most of this year dealing with a wrist injury and rheumatoid arthritis.
"It's been a long time coming," Kelly said. "You wonder if you're ever going to do it again when the injuries start piling up."
The SAS Championship was the final tournament before the Charles Schwab Cup playoffs start this week for the top 72 players.
Woody Austin, despite a 75 in the final round, tied for 17th and moved up two spots to No. 71. Lee Janzen held down the 72nd spot. Ernie Els goes into the post-season as the No. 1 seed.
Ten Australians will compete in the playoffs, led by Richard Green. Ranked No.4 behind Els, Steve Alker and Stephen Ames, 53-year-old left-hander Green has been the standout among the Aussies this season.
He boasts four second placings among nine top-10 finishes, having made the cut in all 22 events he has played, while earning $US1,847,919.
Joining Green in the playoffs are fellow leftie Greg Chalmers (ranked 21 starting the week), Mark Hensby (25), Stuart Appleby (26), Steve Allan (33), Rod Pampling (37), Cameron Percy (38), Michael Wright (49), David Bransdon (54) and John Senden (60).
