Bayern Munich lost 2-0 to Borussia Dortmund on Saturday, their first home "Der Klassiker" loss in a decade, allowing Bayer Leverkusen, who came back to win 2-1 over Hoffenheim, to go 13 points clear with seven games remaining.
Leverkusen's victory put the onus on Bayern in Saturday's late match, but the German champions lost at home with Dortmund scoring goals in each half through Munich-born Karim Adeyemi and defender Julian Ryerson.
Harry Kane had the ball in the net in the dying stages to give Bayern hope of a comeback, but the England captain's goal was struck off for offside.
Bayern coach Thomas Tuchel sent "congratulations to Leverkusen".
Asked if the title race was over, Tuchel replied "of course", saying "it's self-evident, clear".
Bayern defender Joshua Kimmich was livid and publicly criticised his team.
"I wonder how we can put in such a performance in a game like this. It's completely incomprehensible.
"In the second half you had the feeling that nothing was at stake, it was like a friendly.
"We need to go home and question ourselves."
Dortmund's first league win in Munich in 3 641 days, dating back to 2014 when Jurgen Klopp was in the dugout, took them three points clear of RB Leipzig and back into fourth place with the battle for the Champions League intensifying.
The win in Munich "took too long" said Dortmund coach Edin Terzic.
"We had a bit of luck, but we worked hard for it," Terzic told Sky.
Earlier on Saturday, Maximilian Baier gave Hoffenheim a 1-0 lead at Leverkusen.
But with this season's unbeaten record in serious danger a day after Xabi Alonso pledged to stay on as coach for another year, the league leaders hit back.
Robert Andrich levelled in the 88th minute before an injury-time Patrik Schick volley sealed another remarkable comeback win.
Leverkusen's late win continued their record of victories in the dying moments this season.
Alonso's side have scored late to beat Augsburg, Leipzig, Stuttgart in the German Cup and Qarabag twice against in the Europa League.
"I was always optimistic," Alonso told reporters. "We said at halftime that one goal is important. Everything can change in one moment.
"We have a winner's mentality – we built that for ourselves this season."
ALONSO 'NOT GOING ANYWHERE'
"We kept fighting and kept believing until the end," Leverkusen goalscorer Andrich said to Sky.
"I had no doubt we'd score at least one today. I knew eventually one of our shots had to go in."
The midfielder, who stood alongside his coach as the team celebrated in front of the home fans after the match, said Alonso told the players on Friday he would stay beyond the season.
"He said he wasn't going anywhere – he said he'd stay here.
"The timing he chose was very good. Now we can keep pushing and hopefully achieve something great this season."
Dortmund's win meant RB Leipzig's bid for a Champions League spot took a hit, after the German Cup holders played out a scoreless draw at home against lowly Mainz despite dominating possession and territory.
The home side were twice denied in the opening half, with an eighth-minute handball penalty overturned by VAR and a Lois Openda goal chalked off for offside.
"I can't hear another word about expected goals – we just didn't take our chances," lamented Leipzig's David Raum.
Champions League regulars for the past decade, RB Leipzig and Dortmund face off in the league in late April at the Red Bull Arena.
New Wolfsburg manager Ralph Hasenhuettl, the former Southampton coach, claimed victory in his first match in charge, 2-0 at Werder Bremen.
Bremen were reduced to 10 men just before halftime following a last-man foul from Anthony Jung. Maxence Lacroix put the Wolves in front shortly afterwards.
Lacroix was sent off in the second half, but Wolfsburg's Lovro Majer scored to seal the win.
Freiburg took a step towards European qualification in long-serving coach Christian Streich's final season at the club with a 3-0 win at Borussia Moenchengladbach.
The Black Forest side were in full control against struggling Gladbach, Michael Gregoritsch, Merlin Roehl and Ritsu Doan all scoring goals.
Union Berlin held Eintracht Frankfurt to a 0-0 away draw, picking up a valuable point to go nine clear of the relegation spots.