George Burley's men needed the unlikely combination of a win against Liverpool at Anfield and a Derby victory at Sunderland.
But they never looked like delivering their side of the bargain, crumbling to a 5-0 defeat against Liverpool at Anfield.
John Arne Riise dealt the first blow to their hopes, powering home in typical fashion after 13 minutes and then adding a second in the 35th.
Michael Owen pounced on a Titus Bramble error just after the interval to put Liverpool three ahead before Vladimir Smicer and Nicolas Anelka ensured runners-up spot in the table for Gerard Houllier's side.
It was comprehensive as the Reds achieved their highest league finish since they last won the title 12 years ago.
Ipswich's mass of blue-shirted fans were defiant, as were their team, but so many in different displays in the depths of winter and at the beginning of the season when Europe got in their way, had the Tractor Boys in this mess.
The two Bents, Marcus and Darren, caused Stephane Henchoz and Sami Hyypia problems with their strength and resilience while Matt Holland looked the class act that will surely not linger long at Portman Road now.
Liverpool's victory said everything about the improvements in the side. Strength, power, clinical finishing and an unstinting team spirit.
John Arne Riise scored two, Michael Owen made it 28 for the season, Vladimir Smicer poached a solo effort and Nicolas Anelka grabbed one to make a small point of his own - Liverpool have plenty to build on here to make Arsene Wenger's words about Arsenal dominance sound a little previous.
Ipswich had plenty of possession but they were stunned after just 12 minutes with the sort of strike few keepers would have stopped.
It was the thundering shooting boots of Riise that had Liverpool ahead. Abel Xavier's ball into the box was flicked on by Michael Owen for the left midfielder to somehow pop up in the inside-right channel to crash a rising drive high into the net from 12 yards leaving Andy Marshall helpless.
Ipswich, though, were not prepared to pack it in just yet and should have equalised on 19 minutes. Jamie Clapham's cross from the right was met on the six-yard line by Darren Bent, and his powerful downward header was held on the line by Jerzy Dudek.
First Martijn Reuser was furious with referee Steve Dunn when Henchoz looked to have handled as he threw his body in the way of a cross, but Dunn's reaction was the same as it was in the FA Cup final last season when Henchoz got away with a similar interception from Thierry Henry.
There was more than a flutter of concern around the stadium on 32 minutes when Steven Gerrard, one of England's great hopes for the World Cup, made a premature exit from proceedings.
Smicer took over as Gerrard marched off, in no obvious discomfort as has been his previous exits from games, but he was taken straight down the tunnel by club doctor Mark Waller.
Smicer's arrival produced the second goal. He raced from halfway, and was sent crashing to the ground just outside the box with the ball breaking for Riise.
Referee Dunn played advantage and the ball was instantly crashed in off the far post by Riise.
Ipswich's next piece of bad luck was soon to arrive. Ipswich's response to the second Liverpool goal was a thundering drive from Reuser a minute later that came back off the woodwork.
Then Ipswich lost key defender John McGreal, who had been struggling with a leg injury, Fabian Wilnis coming on after 38 minutes.
If there was much doubt about the outcome it was surely ended 44 seconds into the second half.
Titus Bramble made a terrible hash of a dropping ball into the box, twice failing to clear before attempting to prod the ball back to Marshall.
Owen was on the ball in a flash and lifted it over the advancing keeper for his 19th league goal of the season, his best-ever Premiership return.
The fourth was not long coming, the fight now gone from Ipswich. Smicer skipped into the box from the right, nutmegged Hreidarsson and scampered on to clip the ball past Marshall on 57 minutes.
Gary McAllister finally got on to say his farewells to a standing ovation on 80 minutes when he came on in place of Murphy.
But Anelka, on for Xavier, made his point about staying with a classical fifth, gliding through and steering his shot wide of Marshall with four minutes left.