The former champions needed to win and earn one more bonus point against Middlesex at the Oval but their survival hopes were dashed early on the second day when Scott Newman played back and was trapped lbw by Indian spinner Yogesh Golwalkar.
With the visitors assured of safety, and the result meaningless, Mark Ramprakash then struck an unbeaten double century as the hosts reached 462 for four at stumps, a first-innings lead of 58 runs.
Surrey chief executive Paul Sheldon told Sky Sports News: "We've seen this coming for some while but now we have to regroup, use our younger players, work hard in the winter and come back fighting next year.
"We'll be looking for an overseas player and a few changes but we've got some great youngsters here and I have great confidence that we will rebuild a capable squad."
Lancashire were forced to put their Division Two celebrations on hold after their failure to claim sufficient bonus points denied them the chance to wrap up the title race early at Old Trafford.
Hoping to confirm their status as champions by the close of the second day against Leicestershire, Lancashire knew they needed a further 239 runs after resuming on 61 for two to claim three batting points and rule Yorkshire out of the equation.
But they were dismissed for 191, and in the Foxes second innings they reached 158 for seven, a lead of 132.
The title, however, is almost secure after former England left-hander Usman Afzaal hit 157 at Wantage Road against Yorkshire.
Resuming on 98 for two, the Northants batsmen made a mockery of Yorkshire's first-day capitulation to reach 476 for nine declared. The visitors reached 22 for one in their second innings - 277 runs behind - after losing Joe Sayers.