Just a week after falling 28-22 to Tonga, the Kiwis have been beaten by a second tier-two side in a low-scoring match they had never looked like winning.
Two Apisai Koroisau penalties to a sole Shaun Johnson effort on Saturday were enough to give the Bati a well-deserved win over a Kiwi team which never managed to get out of first gear.
An error-ridden performance from the Kiwis was comprehensively punished by a Fijian outfit, who showed more pace, poise and precision than the lacklustre New Zealanders.
Fiji face the daunting task of toppling the Kangaroos in next weekend's Brisbane semi-final. Defending champions Australia thumped Samoa 46-0 in Friday night's quarter-final in Townsville.
The early chances went to Fiji, Brayden Wiliame darting through after five minutes but denied the try when he lost the ball over the line, while Marcelo Montoya came close 15 minutes later down the left edge.
Fiji's defence, largely untested during an unbeaten pool run, was never really pressured in the first 40 minutes, the Kiwis their own worst enemies with a succession of handling errors and missed tackles.
The Bati continued to dominate possession and territory as the game wore on, Akuila Uate unleashing Henry Raiwalui down the left after 30 minutes with only a despairing ankle tap between him and the game's first try.
The Kiwis sparked into brief life right on the halftime whistle, but ran out of time, options and space, leaving Koroisau's 14th-minute penalty the only difference between the two sides at the break.
A Johnson penalty levelled the scores four minutes after the restart, Fiji storming back immediately with a sweeping move highlighted by a stunning run from Suliasi Vunivalu.
Reduced to 14 men after Jordan Rapana was binned for slowing the play the ball, the Kiwis were hanging on by a thread as Fiji took a 2-0 lead into the break.
Johnson levelled the scores early in the second spell, as the Kiwis looked out of ideas.
At that point, Fijian skipper Kevin Naiqama said he could sense victory.
"When they took that kick - if a team feel confident they can score against you, they'll take the tap," he said.
"I was telling the boys at the moment when they were placing the kick, to take confidence - it was respect to us, to our defence, and that's why they took the two points.
"At that moment, I felt the utmost confidence we could get the job done."
A 62nd-minute penalty restored Fiji's lead, a margin they defended with ease.
Naiqama said that defensive effort had been a work in progress all week, and it was satisfying to see the hard work pay off.
"I'm just real proud of the boys' efforts, fighting all the way to the last second. It's a historic win but, in saying that, the job's only half done and we've got Australia to focus on next week."
Kiwis playmaker Johnson admitted the hurt of being kicked out of the RLWC was crushing.
"I guess the most disappointing thing for me is everyone who doubted us - the fans, media, you got your way," said Johnson.
"We couldn't deliver what I thought we could deliver and that's what burns.
Kwis skipper Adam Blair was visibly upset as he tried to hold back tears in the post match press conference.
Blair said despite the loss he was still proud of his team.
"I'm emotional because I'm proud.
"The smart stuff we missed tonight, the toughness you seen out there all game.
"There had to be a loser tonight, unfortunately it's us and we are really disappointed about it."
The Kiwis coach David Kidwell echoed Blair's sentiments.
"Fiji played a simple game, but the boys' effort out there? I couldn't be more proud of them.
"It's definitely been the most-enjoyable campaign I've been part of. I'm proud of this group of men but, unfortunately, we didn't get the result we wanted today.
"We didn't play smart again, made a couple of errors on the first tackle and put ourselves under pressure."
Johnson said it felt like the Kiwis had shot themselves in the foot with their first-half effort.
"It honestly felt like we were defending our try line that whole first half and then, when you expect your middles to try and get some go-forward going, it's always going to be a bit more difficult," he said.