The Ineos Grenadiers leader crashed in the neutral section at the start of stage three when he was taken out by a stray bidon.
Thomas was able to finish the stage to Mount Etna, but the crash had clearly taken its toll as he reached the summit 12 minutes down on his rivals.
Scans after the stage revealed Thomas had suffered a fractured pelvis and his team announced before the start of stage four that he had abandoned the race.
Thomas said: “It’s so frustrating. I’d put so much work in to this race. I did everything I could and feel like I was in just as good, if not better shape, than when I won the Tour. I was feeling really good. So for it just to end like this is gutting.”
He added: “I was really up for starting today. I woke up and wanted to start with the boys and at least help them go for stages over the next few days, but deep down I knew something wasn’t right, so we went to get these extra scans.
“It does make the decision easier when there’s a fracture in some ways, because obviously I don’t want to do anymore damage.”
Thomas had been in great form leading up to the Giro, finishing second in Tirreno-Adriatico just weeks before.
The 34-year-old put in a strong performance on the Giro’s opening time trial stage and was sitting third as the race hit the first mountain, Mount Etna, on stage three.
Ineos Grenadiers team doctor Phil Riley said: “Geraint had an MRI and a CT scan this morning which revealed a small undisplaced fracture in the lower part of the pelvis which wasn’t picked up on the X-rays yesterday. As a precaution he will be withdrawn from the race as it’s an injury that could easily be aggravated.”