The Three Lions went into the match winless in League A, Group 3.
England, rock bottom of their group with two points accrued from their opening four games, needed to avoid defeat in Milan to keep their hopes of remaining in Tier A alive.
However, they could not get the result they needed as they were beaten at San Siro.
Giacomo Raspadori scored the only goal of the game in the 68th minute – and what a goal it was.
The Napoli striker expertly controlled a long ball towards him.
He manufactured some space for himself before curling a beauty into the bottom corner.
Nick Pope in England’s goal had absolutely no chance.
VIDEO: Raspadori relegates England with beauty
England pushed for an equaliser after falling behind.
Harry Kane had England’s best chance but he saw his fierce effort from inside the box well saved by Gianluigi Donnarumma.
Italy came ever so close to doubling their lead late on but Federico Dimarco’s struck the post and away to safety.
It did not matter, though, as Gli Azzurri held on for a narrow victory and ensured England’s relegation.
Gareth Southgate’s side are now winless in five games and are on their worst run of form since 2014.
They have gone over 450 minutes without scoring from open play.
The travelling England fans were not happy and there were audible boos when Southgate acknowledged them after the match.
It’s been a dismal campaign for England they will be playing in Tier B of next season’s Nations League.
England play their final game before the World Cup starts against Germany on Monday.
The Three Lions are currently in terrible form and will be hoping to pick up a morale-boosting victory against Hansi Flick’s side.