Henry de Bromhead-trained 11/1 chance Special Tiara held off the fast-finishing Fox Norton to win by a head and claim success in the race at the fourth time of asking.
Douvan, who attracted one wager of £500,000 despite being one of the shortest-priced favourites in Cheltenham history at 2/9, was never in contention and finished seventh, 12 lengths adrift.
“I didn’t think I could beat Douvan, but I thought I had a great chance of being second,” said Fehily, who also rode Buveur D’Air to glory in Tuesday’s Champion Hurdle.
“I got over the last and was surprised something hadn’t come to me, but I knew he wasn’t stopping. I thought he would be stalking me but we just got into such a great rhythm going down the back straight.”
Trainer Willie Mullins suggested that Douvan, who had won his 14 previous races, may have been hampered by an injury.
“We are all a bit gobsmacked,” Mullins said. “He didn’t jump as well as we had hoped, with his usual fluency. He probably pulled something – a muscle, a ligament – hopefully something that will come right straight away.
“I’m hoping he could be one of the best horses I have ever trained. Today clearly was not his day.”
Earlier, Might Bite clung on for an unorthodox win in the RSA Novices’ Chase.
Jockey Nico de Boinville had the 7/2 favourite 15 lengths clear turning for home but stumbled badly at the last and had to find a late burst to pip another Nicky Henderson-trained runner, Whisper, by a nose.