Yu's reward for taming the flood was the throne itself. Chinese tradition remembers the age before him as governed by abdication, in which a ruler, nearing the end of his reign, passed power not to his own son but to whichever man in the realm had proven most capable and virtuous. Yao had passed the throne to Shun this way rather than to his own less able son, and Shun, recognizing Yu's achievement in ending the flood, passed it to Yu in turn.
Yu, according to Sima Qian's Records of the Grand Historian, initially observed the same custom, naming a minister named Yi as his intended successor and withdrawing from public life to let Yi take the position at the proper time, in the pattern Yao and Shun had set. But when Yu died, the lords of the realm are said to have gone instead to Yu's own son Qi, judging him the abler man, and Qi accepted the throne, breaking the abdication custom and establishing hereditary succession within Yu's own family. This is traditionally counted as the founding of the Xia dynasty, held to be the first dynasty of Chinese history, though its existence is not directly confirmed by archaeology in the way the following Shang dynasty is, and its opening reigns are treated by most modern historians as legendary or only partly historical.
The transition is remembered in later Chinese political thought as the hinge between the idealized age of virtuous abdication and the long history of dynastic, hereditary rule that followed it, with Confucian writers often looking back to Yao, Shun, and Yu as the model of rule by merit even as they accepted that Yu's own dynasty was the one that ended it.