Gamba, who four years ago finished third in the FIFA Club World Cup, were one of only five teams to have competed in J-1 every year since the J-League was launched in 1993.
The Osaka side, 2005 Japanese champions and 2008 Asian Champions League winners, needed to win and hope results went their way elsewhere but things went wrong, quickly.
Japan striker Ryoichi Maeda put Jubilo ahead after five minutes and, although Shu Kurata equalised, Gamba's fate was sealed when Yuki Kobayashi scored five minutes from time.
Gamba could now be in danger of losing Japan's record cap winner, playmaker Yasuhito Endo, whose services are coveted by several European clubs.
Gamba had finished in the top three of the J-League first division in eight of the past 11 seasons.
At the 2008 Club World Cup they beat Adelaide United before being beaten 5-3 by Manchester United in a pulsating semi-final in Yokohama.
Gamba beat Mexico's Pachuca in the third-place play-off.
Local rivals Vissel Kobe will join Gamba in J-2 next year after they were beaten 1-0 by newly crowned J-League champions Sanfrecce Hiroshima.