The London 2012 bronze medallist started poorly on Saturday, his first two marks - 54 and 47.25 - far below the 80s and 90s he produced in Friday's heats.
Daley needed 102 points on his closing dive to reach the final, but only managed 50.40 to finish in 18th place with 403.25.
The 22-year-old told BBC Sport: "It's really hard to accept. I've worked so hard.
"Yesterday I scored the highest score ever in an Olympic Games. Today it wasn't meant to be. That's what diving does sometimes.
"I truly am heartbroken because I feel like I am in the peak physical condition and I could have won tonight."
China's Chen Aisen was top with 559.90, more than 150 points ahead of Daley.