Birmingham were relegated after only drawing 0-0 at home to Newcastle while Portsmouth stayed up with a dramatic 2-1 victory at Wigan.
Steve Bruce shows his frustration as Birmingham are relegated
The Blues needed to match or better Pompey's result to tee-up a last-ditch bid for survival next week at Bolton.
But after missing a hatful of chances they were unable to seal the victory they needed to fight another day.
England got a boost as fit-again Newcastle striker Michael Owen came on as a second-half substitute.
Blues manager Steve Bruce made one change to his side that drew at Everton - Jiri Jarosik replaced Nicky Butt, who was unavailable under the terms of his loan deal from Newcastle.
It was Jarosik who had City's first chance after three minutes when Jermaine Pennant's free-kick was only half-cleared and the Czech midfielder swivelled to fire over form 15 yards.
The home side continued to apply the early pressure and carved out another opportunity when Emile Heskey headed over from Mario Melchiot's deft left-wing cross.
Jarosik continued to justify his selection as he drove forward in the 15th minute before unleashing a 25-yard left-footed drive past Shay Given's right-hand post.
As Newcastle struggled to get a foothold in the match, Bruce's men did all they could to pepper the visitors' goal.
In the 25th minute Mikael Forssell connected with Heskey's headed knock-down and rifled a left-footed drive that whistled wide left.
The lively Pennant, happy to pop up on either flank, delivered another accurate cross (38), which Heskey controlled well but only hit straight at Given.
With Martin Taylor keeping things tight at the back, Birmingham were able to keep the in-form Shola Ameobi at bay and went into the break at 0-0.
Birmingham carried on where they left off at the start of the second half when Pennant volleyed over (48) as the hosts again lay siege to the visitors' goal.
But they were thankful to Melchiot for making a brilliant interception to deny Charles N'Zogbia a shooting chance.
Newcastle introduced Owen for Michael Chopra after 60 minutes - his first appearance since breaking a foot bone on New Year's Eve.
Birmingham kept pressing and were denied a penalty when Heskey looked to have been brought down but play was waved on by the referee Martin Atkinson.
And then both Forssell and Heskey were denied in stoppage time with a brilliant double save from Given as the hosts were unable to find the vital goal that would have handed them a vital lifeline.
Birmingham boss Steve Bruce:
"We knew had a tough job and did everything possible. When Shay Given denied us at the end we knew it just wasn't to be.
"We had to beat a Newcastle side who have been on their best run and were very confident. We worked our socks off but it didn't go for us.
"We've enjoyed our time in the Premiership and this is where the club needs to be.
"It's a big job for whoever it will be to try and lead us back and there's a lot of work to do over the summer. I hope I can do that but now is not the appropriate time to talk about it."
Newcastle caretaker boss Glenn Roeder:
"We came here knowing this would be one of our toughest games of the season as Birmingham were fighting for their lives.
"We knew they'd be direct but all credit to our defence and Shay Given as we kept them out.
"It's hard for Steve (Bruce) but he's had little luck with injuries but I'm sure he is the right man to lead Birmingham back into the Premiership next year."
Birmingham: Maik Taylor, Melchiot, Cunningham (Clemence 87), Martin Taylor, Sadler, Pennant, Jarosik, Johnson, Gray (Campbell 72), Heskey, Forssell.
Subs Not Used: Vaesen, Bruce, Tebily. Booked: Melchiot, Johnson.
Booked: Melchiot, Johnson.
Newcastle: Given, Carr, Moore, Bramble, Babayaro, Solano, Pattison (Clark 68), Faye (Boumsong 87), N'Zogbia, Chopra (Owen 61), Ameobi.
Subs Not Used: Harper, Elliott.
Booked: Solano, Carr.
Ref: M Atkinson (W Yorkshire).