The Movistar team said a preliminary examination showed no fractures, but that Dowsett suffered dislocated thumbs on both hands.
The three-time British time trial champion and stage winner in the Giro d'Italia was hoping to prove himself in the 13km stage 5 time trial, but instead finds himself out of the race.
"Not entirely sure what happened, hit the old head as well, pretty gutted to be out," Dowsett said via Twitter.
He is likely to return for the Tour of Britain in mid-September.
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