England were comfortable winners against Ukraine but missed out on automatic qualification for the Women's World Cup so must now take the longer route to Brazil 2027.
Sarina Wiegman's side needed group leaders Spain to lose or draw in Iceland, but the world champions raced to a 6-1 victory to book their finals place.
Only the top team in the qualifying group secured an automatic spot, meaning England will have to navigate two rounds of play-offs later this year.
It is a blow for England, who won five of their six group matches but suffered a damaging 4-0 defeat in Majorca on Friday which proved to be their downfall.
They responded with a much better performance at Hill Dickinson Stadium in Liverpool as Wiegman made four changes to the starting XI and switched up the backline.
One of the defenders to come in, Jess Carter, opened the scoring when she headed in from close range, before Georgia Stanway poked home England's second.
It should have been a more flattering scoreline by half-time as England missed several big chances, including one for Maya le Tissier, while Lauren James curled an excellent effort against the post.
The Lionesses did eventually extend their lead when substitute Beth Mead drilled the ball into the bottom corner from a free-kick.
England finish League A3 as runners-up, below Spain because of their inferior head-to-head record, and will find out their play-off opposition on Thursday, 18 June.