The 22-year-old had looked in stunning form in the prelims on Friday night, scoring a staggering personal best of 571.85 points, to leave the rest of the field in his wake.
But it all went wrong for him on Saturday in the semi-final and he could only finish 18th with 403.25 points after dropping his first three dives that left him with too much to do.
European champion Daley had been desperate to win gold in Rio after been forced to settle for bronze in London four years early.
He had said after scoring 571.85 points in the prelims that he thought there was even more to come, but now he will have to watch on as his rivals battle for gold on Saturday evening.
Daley, who did win a synchro bronze in Rio with Plymouth Diving’s Dan Goodfellow, was clearly upset at not making the final.
He said: “I truly am heartbroken because I really do feel I am in peak physical condition and I could have won tonight.
“It is really, really hard to accept how it went today.
“I have worked so hard over these last four years to get to this point.
“Yesterday I got an Olympic record but today it was just not meant to be.”
He added: “I so wanted to stand on top of that podium, but it was not meant to be, so another four years of hard work to try again next time.
“But I just so wanted to get that Olympic gold medal this time around.
“Tokyo is definitely in my sights, more so than ever now.”