Chasing only 120 for victory in Chittagong following a strong bowling display, New Zealand fell 59 runs short of reaching the semifinals as Sri Lankan spinner Rangana Herath ripped through the Black Caps to finish with the breathtaking figures of 5 for 3.
Black Caps fans may well have woken up thinking it was an elaborate April Fool's joke as Kane Williamson was the only New Zealand batsman to score more than five runs, making 42 before being run out. He scored 70 percent of New Zealand's total.
5, 0, 0, 0, 2, 2, 4, 3, 0 - the scores of New Zealand's other eight batsmen as the Black Caps recorded their lowest score in the Twenty20 format.
New Zealand were one batsman short after Corey Anderson suffered a finger injury and finished 60 for nine after 15.3 overs.
Brendon McCullum, Ross Taylor and Jimmy Neesham all feel for ducks to Herath as the Black Caps slumped to 33 for six.
Williamson and Kyle Mills started somewhat of a revival, in the smallest sense of the word, putting on 18 for the seventh wicket before New Zealand's final three wickets fell in quick succession.
Earlier, Trent Boult and Neesham claimed three wickets apiece to bowl Sri Lanka out for a moderate total. Mahela Jayawardene made 25 while Lahiru Thirimanne scored 20.
"It was a bit dry than we expected and Herath and Sachi [Sachithra Senanayake], the way they bowled was outstanding. They blew us away with about eight wickets for some 10 runs," Black Caps skipper Brendon McCullum said after the defeat.
"We just didn't adapt ourselves and played some mindless cricket. We took some poor options and as a result of that we're on the plane home".
It is the fourth straight time New Zealand have failed to make the semifinals at an Twenty20 World Cup, having only reached the final four at the inaugural event in 2007.
Sri Lanka will face either Pakistan or West Indies in the semifinals. India will play South Africa in the other semifinal.
