Ipswich 2 Man City 1
Manchester City slumped to their second relegation in four seasons as Ipswich produced a late comeback to sink Joe Royle's men at Portman Road.
City, who started the night needing to win both their remaining matches and a favour from West Ham to avoid the drop, looked set for a surprise win when Shaun Goater bravely turned in a loose ball 16 minutes from time.
But Manchester United fan and Ipswich captain Matt Holland restored parity and Dutch winger Martijn Reuser netted late on to confirm an immediate return to the Nationwide League for a side that had ironically booked their place in the top flight a year ago to the day.
For George Burley's side, the Champions League remains a possibility next season with their 20th victory of a sensational return to the Premiership putting them level on points with third-placed Liverpool.
Despite needing to win to stay up, City remained remarkably reserved during the first period with Paul Dickov's acrobatic volley which was held by Richard Wright in the fifth minute far from an example of what was to come.
Jermaine Wright forced Carlo Nash to watch a 30-yard drive all the way into his midriff and Alun Armstrong struck his shot too close to the keeper after James Scowcroft had offered his strike partner the opportunity on goal.
Danny Tiatto's industry set up the visitors' only other bright moment in the opening 45 minutes by seizing on a loose Reuser pass and marauding into the Town half to find Paulo Wanchope, but the Costa Rican's effort was easily gathered down to his left by Wright.
Thereafter it was all Ipswich in a surprisingly low-key opening to a game both sides were desperate to win.
Ipswich continued to show the greater endeavour on the resumption and Nash was forced to collect a John McGreal curler at the foot of his left-hand post following a goalmouth scramble.
Precious little attacking verve was on display as City's backline kept Scowcroft and Armstrong in check, although Wanchope did strike a post with an acrobatic overhead kick just past the hour mark.
However, 16 minutes from time, Goater sent the travelling contingent in the 25,000-plus crowd wild with delight.
Wanchope stole a yard on McGreal, found room for a shot on the edge of the area and when Wright spilled the ball, Goater reacted quickest, beating Titus Bramble to the rebound and poking into the corner of the net.
Lifted by their goal, Jeff Whitley thudded a long-ranger into Wright's arms two minutes later.
But Holland reignited the hosts' hopes of the three points with a great 78th-minute finish.
Scowcroft headed down Jamie Clapham's free-kick, Naylor touched on and the Republic of Ireland midfielder thrust out a leg to spear the ball wide of the despairing Nash.
Another City substitute, Mark Kennedy, sought a deciding goal almost immediately only for Wright to palm away low to his right.
City's fate was confirmed, however, six minutes from the end as Armstrong centred with the outside of his right boot and Reuser planted his diving header out of Nash's reach.
It was the Dutchman's sixth goal in 10 matches and capped a cruel turnaround for City while the Tractor Boys' Champions League dream is still alive. -PA