The 22-year-old has been forced to return to Italy and undergo treatment for a thigh injury
It was already announced the striker would be unavailable for the semi-final against Spain, but after monitoring the injury on Monday, Balotelli is being sent home to recover.
The Milan striker suffered the setback in Saturday’s 4-2 loss to Brazil, and according to team doctor Enrico Castellacci, it was serious enough to cut his tournament short.
“Balotelli can not even get to the final,” he told reporters.
“Milan will now take care of him.”
The news comes as a big blow to the Italians who were using Balotelli as their lone striker throughout the group stage.
Bologna’s Alberto Gilardino is the only other main forward on the team while wingers Stephan El Shaarawy and Sebastian Giovinco are also available.
Coach Cesare Prandelli laments the loss, but knows they have to move forward and remain focused if they hope to take out the defending world and European champions Spain.
“We are very sorry for the loss of Balotelli but there was no time for his recovery,” he told reporters.
“There was no pressure from the Rossoneri [to keep him out and prevent further injury].”
Italy play Spain on Thursday and the last time the two sides met la Roja won 4-0 to lift the Euro 2012 trophy.