Barry had been a solid performer for Sky since the race began on Sunday and his forced abandonment will be a major blow to the outfit.
"He was in the line and they were all in the gutter going flat out when someone in front of him hit one of the cat's eyes on the road and lost his front wheel and went straight down; Michael said he just didn't have any chance at all to react – they were doing about 70km/h at the time," said Sky race coach Rod Ellingworth.
"He's also quite badly cut and grazed and has taken a lot of skin off his back which is going to be the worst thing as he's not going to sleep well at all."
Barry now joins Coen Vermeltfoort (Rabobank) and Champion System pair Clinton Avery and Will Clarke on the non-starters list with two stages left to race.
Tweeting following the confirmation of his injury, Barry said: "Thanks for the kind messages. Sadly I broke my elbow. Surgery required. Hopefully back on the bike before too long."
Sky won Tuesday's third stage with World Champion recruit Mark Cavendish however the team was not entirely satisfied with the results garnered from Stage 4 with three riders making the top 10 placings – Juan Antonio Flecha (4th), Bernie Eisel (8th) and Ian Stannard (10th). Cavendish was adrift in 34th place, 54 seconds down on the time of stage winner, Tom Boonen (Omega Pharma-QuickStep).
"Three riders in the top ten is good, but not enough," Eisel told Cyclingnews. "We had one card to play, and that was Cav. We did a good race but I have to be honest – we could have worked better as a team and given each other more shelter in the conditions.