Three days after the shadows incident, only Otonashi, Yuri, Kanade, Hinata, and Naoi remain; the others have passed on. Per Kanade's idea, they hold a graduation ceremony, complete with an anthem, diplomas, and a speech. At end of the ceremony, Naoi takes his leave; Yuri makes her peace with Kanade before she leaves; and Hinata follows shortly. Alone together, Otonashi suggests to remain in the afterlife with Kanade, intending to help others who might enter the afterlife. At the same time, he confesses his love to her, but she reveals herself as the recipient of his transplanted heart. After giving Otonashi her gratitude, she finally disappears, leaving him in frantic tears. Finally, in an epilogue, a girl resembling Kanade is humming Iwasawa's "My Song" in the world of the living, and a boy resembling Otonashi passes by and recognizes the melody. When the girl walks onward, the boy moves to tap her shoulder. The scene fades to white just before he makes contact.
Alternatively, in the BD/DVD-exclusive short "Another Epilogue," Otonashi remains in the afterlife and becomes the new student council president, helping out other students to pass on. (Source: Wikipedia)