Williams admitted that a bad back sustained during practice hampered her movement, but refused to blame the injury for her stunning exit that blew the Australian Open wide open.
Raging favourite to clinch her 18th Grand Slam title and sixth at Melbourne Park, the world number one was overhauled 4-6 6-3 6-3 in front of an astonished Rod Laver Arena crowd as the resurgent Ivanovic soared to her finest victory in years.
Williams crashed out in a hail of 31 unforced errors and managed only three winners in the third set as the anticipated fightback the American has counted on throughout her career failed to materialise.
Her coach Patrick Mouratoglou, who talked up a serious tilt at a calendar Grand Slam before the tournament, said Williams had "blocked" her back during practice before her third round match against Daniela Hantuchova.
"I guess the secret is out, but I obviously wasn't hitting the way I normally would hit and wasn't moving the way I normally would move and making a lot of errors that I normally would not make and I haven't made in a couple of years," she told reporters after her 25-match winning streak was snapped.
"But it's okay. I feel like I know for a fact I can play so much better than what I did today, so with that, knowing that, I'm not disappointed or anything.
"I just know that I can play 10 times better than what I did today.
"I have just been on some -- the strongest meds I can take, that are legal, which my body didn't handle it well because I haven't been taking anything. So I was like really kind of out of it for a few days."
The back injury makes three straight Melbourne Park campaigns where Williams, the greatest player of her generation, has suffered untimely fitness problems to exit relatively early.
She was knocked out last year in the quarter-finals by Sloane Stephens after rolling an ankle early in the tournament and stunned in the fourth round by Ekaterina Makarova in 2012, having suffered another foot injury in the leadup.
Williams said she was unaware of the nature of the back injury but doubted it would affect her for too long.
"At the end of the day it's not the end of the world, and I keep stressing that I feel like Ana played really well," she said.
"I think she played a really good match. I don't want to sit here and make an excuse when she played such a great match.
"I made a tremendous amount of errors, shots I missed I normally don't miss. I haven't missed since the '80s. I'm just not used to missing those shots.
"She made some good shots, and I just made way, way, a lot of unforced errors."
Williams had never lost a set to Ivanovic, let alone a match, before Sunday and since last year's Australian Open was riding a 77-3 winning record.
Pundits had talked of the American's 18th Grand Slam title being a formality -- barring injury or illness -- and debated how soon the 31-year-old would reach Steffi Graf's total of 22 Grand Slam titles.
With Williams gone, 20-year-old Stephens is the last American woman in the singles draw. It also leaves a cavernous hole in the top half of the draw, where 14th seeded Ivanovic and China's fourth seed Li Na are the hightest-ranked players.
"I'm always disappointed when I lose, but it's always a good thing," Williams said.
"I plan on getting better. I think it's almost good that I lost today because now I know what to work on, I know what to do when I get on the practice court.
"But like I said, I feel very encouraged to go home, and pain or no pain, just to start working even harder. Every time I lose I feel like I get better, and I'm going to definitely go home and do a tremendous amount better."
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