The Colombian striker broke the hearts of the home side as his last minute strike relegated Lotina's men, while Los Rojiblancos just missed out on fourth spot.
Atletico Madrid has sent Villarreal into the Segunda Division, with a last gasp 1-0 victory in the final round La Liga game at El Madrigal.
With Zaragoza and Rayo both winning, a draw would have been enough for the side in yellow, but Radamel Falcao fired in late on to win it for the visitors, and end the Yellow Submarine's 12-year run in the top flight.
The match was important for a number of reasons. Atletico knew that a win, and Malaga failing to triumph, it would be playing in the Champions League next season. Whereas, Villarreal knew that the points would secure its position in La Liga next season. With so much riding on the result, the first half was an edgy affair.
The away side was looking hungry, fresh from its Europa League triumph in midweek. Diego released Gabi, but his effort was blocked by Diego Lopez. The home side also had a chance soon after, but Hernan Perez could only snatch at his shot, dragging the ball wide of the post.
Roared on by the home support, the Yellow Submarine started to put their opponents under pressure. Two corners in quick succession came to nothing, though, then in a rare break, the visitors nearly went ahead as Eduardo Salvio had a speculative effort from outside the area that fell harmlessly wide.
Both teams were looking nervous in front of goal. Marcos Senna and Salvio both missed the target from the edge of the box at opposite ends of the pitch.
Villarreal was looking most likely to take the lead. Mario Gaspar whipped a cross into the box and Marco Ruben’s header was just over the bar.
News filtered in that Malaga had taken the lead at home to Sporting, but the club was still hoping to find a breakthrough. Diego crossed into the box, and Tiago headed straight into the arms of Lopez.
The visitors then should have gone in front. Juanfran crossed into the area and Filipe Luis' left-footed effort somehow struck the crossbar. Koke then found himself free, but put his shot wide to the right. The pressure was relentless. Luis passed to Salvio in the box, but his effort was saved by Lopez.
Villarreal then had chances of its own, albeit from outside the area. Senna's shot was tame and straight at Thibaut Courtois, then Angel Lopez fired over the bar after a free kick.
Just as the stalemate looked inevitable, Falcao, quiet for the majority of the game, had other ideas. With two minutes remaining he fired in from close range, stunning the home crowd, and sealing Villarreal's fate.
The loss for Miguel Angel Lotina’s team sends it down along with Sporting and Racing Santander.
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