Australia has been relegated from the World Group for only the second time in Davis Cup history after falling to Serbia 4-1 at the Beogradska Arena in Belgrade.
Serbia went into the final day with a 2-1 advantage before wrapping up the tie when world No.3 Novak Djokovic defeated Chris Guccione 6-3 7-6 (7-3) 7-6 (7-5).
Boris Pashanski then beat Peter Luczak 4-6 6-3 6-1 in the shortened fifth rubber.
The Australian cause wasn't helped with the late withdrawal of Lleyton Hewitt before the reverse singles due to a viral infection.
Team captain John Fitzgerald said Hewitt struggled to even get out of bed after waking up with an elevated temperature.
"He actually had a fever last night and when he woke up this morning his temperature was even higher, he just couldn't get out of bed let alone come out and run a half-marathon," Fitzgerald said.
"He's been looking forward to playing Novak for several months. He badly wanted to play him here, but what can you do, that's how the cookie crumbles."
Guccione led 5-2 in the third set tie-breaker 5-2 before fading late to allow Djokovic back into the set.
"Everyone could see Novak wasn’t as fresh and was getting a little bit frustrated … but he came up with some good serves and played great on some big points," Guccione said.
The loss consigns Australia to the Asia/Oceania Group next year where it may be required to battle through two qualifying rounds to earn the right to play for promotion back into the World Group.
"We will be aiming to get right back to this position in 12 months' time," Fitzgerald said.
Guccione added: "We are determined to get back to this stage next year but it's a long road back, there are a lot of good players out there."
World Group, Play-offs 2007
Australia v Serbia
Novak Djokovic (Serbia) bt Chris Guccione (Australia) 6-3 7-6 (7-3) 7-6(7-5)
Boris Pashanski (Serbia) bt Peter Luczak (Australia) 4-6 6-3 6-1
Serbia win best of five series 4-1