Norway scored three goals in the final 15 minutes to deny holders England a place at next year’s FIFA U20 World Cup.
After finishing third in their group at the Euro finals in Finland, the Young Lions went head-to-head with Pal Arne Johansen’s side for a place at Poland 2019.
The World Cup play-off was firmly in the balance until Erik Botheim put Norway in front in the 75th minute.
Eman Markovic added a second on 86 and Jens Petter Hauge sealed the victory in the final minute.
This defeat means England will not get the chance to defend the trophy they won in South Korea last summer.
England (4-2-3-1): 1 Ellery Balcombe (Brentford); 2 Dujon Sterling (Coventry City, loan from Chelsea), 6 Trevoh Chalobah (capt; Ipswich Town, loan from Chelsea), 5 Japhet Tanganga (Tottenham Hotspur), 3 Adam Lewis (Liverpool); 7 Elliot Embleton (Sunderland), 4 Max Sanders (Brighton & Hove Albion); 10 Ben Brereton (Nottingham Forest), 15 Thomas Bayliss (Coventry City), 12 Tariq Lamptey (Chelsea); 9 George Hirst (OH Leuven).
Substitutes: 16 Niall Ennis (Wolverhampton Wanderers) for Hirst 80, 19 Nya Kirby (Crystal Palace) for Sterling 82.
Substitutes not used: 8 Marcus Tavernier (Middlesbrough), 11 Ben Morris (Ipswich Town), 13 Jamie Cumming (Chelsea), 14 Ed Francis (Almere City, loan from Manchester City), 17 Conor Gallagher (Chelsea), 18 Kelland Watts (Newcastle United), 20 Nathan Ferguson (West Bromwich Albion).
Bookings: Chalobah 39, Lamptey 49.
Head coach: Paul Simpson