Djokovic and partner Filip Krajinovic lost 7-5, 6-1 to top-ranked Mate Pavic and Nikola Mektic, the Olympic and Wimbledon champions, in the decisive doubles rubber.

Croatia, the 2005 and 2018 Davis Cup winners, will face either Russia or Germany in Sunday's final.

Djokovic had earlier defeated Marin Cilic for the 18th time to keep Serbia alive.

The world number one, unbeaten in singles in the tournament since 2011, triumphed 6-4, 6-2. It was his 19th successive Davis Cup singles win.

"My season ended tonight and I have no regrets," said Djokovic who hinted at fatigue at the end of a rollercoaster year.

"I'll take advantage of the next few days to rest, recover and forget about tennis."

However, Djokovic refused to discuss if he will defend his Australian Open title next month with tournament organisers insisting all players be fully vaccinated.

The 34-year-old has refused to say whether or not he has been vaccinated against coronavirus.

Defeat for Serbia meant Djokovic closed his 2021 season having agonisingly missed out on the first calendar Grand Slam by a male player in more than half a century when he lost the final of the US Open.

His hopes of a first Olympic singles gold medal were also dashed in Tokyo.

However, he still ended the year tied with Roger Federer and Rafael Nadal on 20 Slams, claimed the year-ending world number one ranking for a record seventh time and will on Monday mark a total of 350 weeks in the top ranking.

Djokovic has also extended his record Masters collection to 37 titles.

"He (Djokovic) showed that he was number one in the world in singles," said Mektic.

"But luckily we didn't play that sport -- we played the sport with four people. We're so happy."

In the opening rubber, Borna Gojo, ranked a lowly 279, pulled off a surprise win over world number 33 Dusan Lajovic, 4-6, 6-3, 6-2.

Gojo has played well above his world ranking in the tournament so far and showed real mettle against Lajovic to come back from a set down, especially after letting slip a 4-2 and 40-0 lead in the first set, losing 17 of the next 18 points.

He also saw off Italy's Lorenzo Sonego (ranked 27) in the quarter-final and Australia's Alexei Popyrin (67) in the group stages.

"In the first set I was up 4-2 40-0, I was in control, I slipped in that game there. I got down on myself a little bit, but then the captain and the teams and the fans picked me back up," said Gojo.

"Obviously Davis Cup is a special competition where the pressure is bigger on everyone and I managed to play some of my best tennis here at this tournament.

"I'm very happy that I managed to get those big wins, ranking wise, but for me it's more important that I managed to get the point for the team."

Croatia had lost both their previous meetings with their Balkan neighbours.

The first came in Split in 2010 when Serbia won 4-1 in the quarter-finals en route to winning the competition.

They also romped to a 5-0 triumph in 2015.