Liverpool went into the game needing to win and hoping for Manchester City to slip up at home to West Ham, but Manuel Pellegrini's men ran out 2-0 winners at the Etihad Stadium.
Newcastle stunned the home fans in the first half when they took the lead thanks to an own goal from Martin Skrtel.
Liverpool hit back with two quick-fire goals in two second-half minutes through Daniel Agger and Daniel Sturridge, but it mattered little in the end to the destiny of the title.
To compound Newcastle's misery Shola Ameobi was sent off after picking up two bookings in a matter of seconds for dissent and substitute Paul Dummett was red carded three minutes from time for a foul on Luis Suarez just five minutes after coming off the bench.
Liverpool looked tentative in the early stages and Newcastle had the first sight of goal on five minutes when Ameobi headed wide from Vurnon Anita's corner.
Ameobi had another sight of goal five minutes later when he got on the end of Moussa Sissoko's deflected cross inside the six-yard box, but could only head his effort straight at Simon Mignolet.
Liverpool had claims for a penalty waved away on 11 minutes when Raheem Sterling burst into the box and went down under a challenge from Mathieu Debuchy, but referee Phil Dowd ignored the home side's appeals.
Liverpool had the ball in the net on 18 minutes when Suarez caught Tim Krul off his line with a quickly taken free-kick, but Dowd disallowed the goal as the ball was still rolling.
Two minutes later Liverpool's title hopes suffered a major blow when Skrtel put through his own net as he shinned Yoan Gouffran's cross from the left past Mignolet for the unwanted record of his fourth own goal of the season.
Agger wasted a great chance to draw Liverpool level on 24 minutes when he rose highest to meet Steven Gerrard's corner only to head it straight at Krul.
Newcastle should have doubled their lead on 27 minutes when Ameobi sent Gouffran racing clear on goal, but Mignolet did well to block his effort before Anita smashed the rebound high over the top.
Liverpool were struggling to make any inroads into the Newcastle defence but Suarez created a chance for himself on 34 minutes when he eluded a couple of defenders with some neat footwork, but his final shot lacked the power to trouble Krul.
Sturridge should have drawn Liverpool level four minutes before the break when Jordan Henderson got down the right and crossed for the England international inside the six-yard box, but the striker glanced his header horribly wide of the target to end a half of frustration for the home side.
Liverpool looked to pick up the pace at the start of the second half and they wasted a great chance to draw level on 56 minutes when Gerrard floated over a free-kick from the left, but both Skrtel and Suarez failed to get on the end of the inviting delivery.
Liverpool drew level on 63 minutes when Gerrard whipped in a free-kick from the right and Agger showed great athleticism to volley the ball home past Krul at the far post.
Two minutes later Liverpool turned the game on its head with almost a carbon copy of their equaliser as Gerrard again whipped in a free-kick from the right and Sturridge was on hand to tap the ball home from close range.
Things got worse for Newcastle before the restart of the game as Ameobi was sent off after picking up two quick-fire yellow cards for dissent towards referee Dowd.
Newcastle were struggling to deal with Gerrard's delivery from set-pieces and Liverpool should have grabbed a third goal on 79 minutes when unmarked Agger somehow failed to head home from six yards.
Newcastle were reduced to nine men three minutes from the end when Dummett was shown a straight red card for a foul on Suarez.