Having played and lost all their three matches so far England can no longer reach Saturday's final which will be contested by Sri Lanka, who still have a match to play against England on Thursday, and hosts Pakistan.
Fast bowler Dilshan Madushanka grabbed a career-best 5-34 as Pakistan were skittled for 110 after Sri Lanka captain Kusal Mendis had won the toss and elected to field.
Sri Lanka, who chased down the second-highest target in ODI history of 430 against England in Rawalpindi, then made 2-114 in 18.1 overs before the floodlight towers were fully switched on at the Gaddafi Stadium for the day-night game.
Kamindu Mendis hit an unbeaten 62 off 60 balls after being dropped by the wicketkeeper before he had scored.
The left-hander, who hit eight fours and two sixes, reached his half century following a pull for six after substitute fielder Ghazi Ghori had touched the boundary with his foot while completing a catch.
Pavan Rathnayake, who scored a century in Rawalpindi during Sri Lanka's memorable win, made 23 not out and together with Mendis eased his side to victory with a 52-run unbroken stand.
Pakistan had already qualified for the final after beating England twice, including an epic one-wicket win on Sunday, and handing Sri Lanka a 37-run defeat in the opening game of the tournament.
But their struggle in the top-order continued with four of the leading five batters falling for single digits.
Fakhar Zaman continued his lean patch when he offered a tame catch at point off Madushanka's short-pitched delivery.
Sadaqat fell lbw to Asitha Fernando's yorker and wicketkeeper-batter Saad Baig chipped an easy catch to short cover off Madushanka as Pakistan slipped to 3-46.
Babar Azam (29) again failed to capitalise on a good start, burning a review when he was plumb lbw to Eshan Malinga's perfect inswinger.
Pakistan's Sunday hero Shadab Khan, whose unbeaten 113 earned the astonishing victory over England, lasted five balls as he tried to sweep Sahan Arachchige and gloved an easy catch to Mendis behind the wicket.
Then, the re-introduction of Madushanka saw the left-arm paceman take three more wickets as Pakistan was bowled out in 25.3 overs.
"Unfortunately, for the last three or four games we are collapsing at the top order," captain Shaheen Shah Afridi said. "We have three days now and we can practice. We will come back in the final and bat stronger. We need to forget this game quickly and take the positives from the previous games."
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