The 28-year-old came into the race among the favourites having defended his Tirreno-Adriatico title with a combination of ruthless descending and inspired climbing.
Despite a well-drilled Astana team joining forces with Cannondale on the front of the peloton for much of La Classicissima their leader appeared to be in trouble once the race reached the Capo Melo.
The race had already been stopped after 117 kilometres due to snow, with an almost two-hour interval before the action resumed 50 kilometres later.
Although Astana continued to set the pace on the front of the peloton as the race reached its deciding phase Nibali began to drift to the rear of the peloton and towards his team car.
"Those guys (in the breakaway) were braver than anybody else. Sometimes in cycling you have to know how to lose in order to win,” the Italian said after the finish.
"This will certainly not be my last MSR. I'm already looking forward. This was just a black day in every sense of the word."
According to his team Nibali was so cold he could not even hold the handlebars on the descent of the Cipressa, terrain where he would have typically shined had the weather been more favourable.
"There was a moment when I thought maybe I had chosen the wrong sport," he added.
With Nibali out, Astana were forced to switch tactics and Maxim Iglinskiy attacked on the Poggio but to no avail. Enrico Gasparotto was the team’s highest finisher in 14th place.
"Nibali was just cold,” Director Sportif Alexandr Shefer said.
“He couldn't hold the handlebars safely in the descent, and it was not possible for him to continue. In perfect weather we had a strategy to put him at the front of the race, and to go for victory. But today the weather won.”
“The cold completely changed the race. The snow in the second hour of racing was accumulating on the riders' hands, arms, chests, faces and helmets, and they were too cold to continue safely. For the organizers to stop the race and put the riders on warm buses to take them over Turchino Pass was the best solution possible, but it didn't necessarily make the race any easier.”
Nibali returns to action next month at the Giro del Trentino.