Italy have failed to qualify for the World Cup for the first time since 1958, as Sweden secured their spot in Russia after the teams' 0-0 draw on Monday in Milan.
Sweden, who qualified for their first World Cup since 2006, go through 1-0 on aggregate on the back of Jakob Johansson's goal last week in the first leg.
Italy, who have won the World Cup four times, will miss out after finishing second to Spain in the UEFA qualifying group stage, and then falling short in the two-legged playoff.
Despite the lack of goals, the game was full of action; each team were controversially denied two penalties by Spanish referee Antonio Mateu Lahoz.
Italy's Marco Parolo was bowled over from behind by Ludwig Augustinsson in the eighth minute, but shouts for a penalty were waved away.
Giorgio Chiellini was booked for dissent, then was fortunate to stay on the pitch three minutes after the referee missed an elbow to the stomach of Ola Toivonen.
It was then Sweden's turn to shout for a penalty, as striker Marcus Berg tried to pass Matteo Darmian, and the ball struck the defender's hand, but nothing was given.
Ciro Immobile then had Italy's first chance to score, running onto Jorginho's through ball, but he could only hit the side-netting.
Sweden were dealt a blow in the 17th minute when Johansson was injured while lunging for the ball and had to be stretchered off the pitch. He was replaced by Gustav Svensson.
Italy's best opportunity to find a goal came in the 27th minute when Immobile bounced a low cross through the six-yard box that was just out of reach of striker Manolo Gabbiadini, and Antonio Candreva then blazed his shot over the bar.
Two minutes later Sweden were screaming for a penalty again -- and Emil Forsberg was booked for dissent -- after Forsberg's attempted cross struck the arm of Andrea Barzagli, but again nothing was given.
Immobile had another chance to score before the break when he got behind the Sweden defence and shot through goalkeeper Robin Olsen's legs, but defender Andreas Granqvist was able to clear the ball off the line.
In the second half, Mikael Lustig levelled a kick at Darmian in the box, but referee Lahoz had already whistled the play dead as the ball touched Darmian's arm.
Italy continued to push for the goal they needed as Alessandro Florenzi's shot flew just wide, and in the 63rd minute coach Gian Piero Ventura made a double change, bringing on Stephan El Shaarawy for Darmian and Andrea Belotti for Gabbiadini.
Soon after, Florenzi's cross into the box fell to the head of Lustig, who deflected the ball onto the crossbar but safely out for a corner.
Ventura then made his final change. Federico Bernardeschi came on for Candreva, meaning prolific Napoli forward Lorenzo Insigne would not see the pitch.
Belotti's soft shot drifted wide in the 84th minute, El Shaarawy's volley three minutes later was saved by Olsen, and Parolo missed as the crowd at the San Siro grew increasingly quiet.
But the goal didn't come, and the inquest will begin after one of the biggest shocks for the Italian team in nearly 60 years. The Azzurri will be the only former World Cup champions to be absent in Russia next summer.
The result is also likely to end the international career of legendary Italy goalkeeper Gianluigi Buffon, who had been on the Italy squad for every World Cup since 1998.