He was taken to hospital suffering cuts to his back and above his right eye after the fall during the 163.9km stage from Murten to Arlesheim.
"Geraint Thomas has been forced to abandon the Tour de Suisse. He was alert and speaking to the team after the crash and will be taken to hospital for checks," his Team INEOS posted on Twitter.
Thomas sat up after the crash and was moving both his arms but has reportedly suffered cuts to his back and above his right eye.
He later issued a statement via Team INEOS confirming he had not sustained any significant injuries.
"There was a lip in the road that came out of nowhere," Thomas said. "An Astana rider hit the lip and crashed and I had nowhere to go. I landed on my shoulder and my face and there was quite a bit of blood.
"You've always got to be cautious with a head injury, and whilst I was keen to carry on, the doctors made the right decision to pull me out of the race."
Team INEOS doctor Derick Macleod gave some more details of the fallout from the crash.
"Geraint took a heavy fall. The main area of impact was to his head. He passed his initial concussion roadside test, but with the nature and severity of the impact, it was felt unsafe for him to continue in the race," he said on the team's website.
"He was taken to hospital and thankfully all the X-rays and scans have come back clear. He's now back in the team hotel and in good spirits."
Macleod added: "He's been given the all clear which is great but we will continue to monitor him over the next few days.
"Knowing Geraint, it won't take him long to get back on his bike but we'll need to ensure he's symptom-free in the next few days before he does so.
"We're optimistic he'll make a full recovery over the coming days though and - all being well - he'll be back on his bike very soon."
Thomas is due to lead the INEOS team at this year's Tour de France after teammate Chris Froome last week crashed while in France for the Critérium du Dauphiné.
Froome underwent extensive surgery following his high-speed crash, which left him with multiple injuries, including a broken femur.
Meanwhile, Deceuninck-Quick Step rider Elia Viviani went on to claim the stage win in Switzerland on Tuesday following a sprint finish in Arlesheim ahead of Australian Michael Matthews (Sunweb) and overall race leader Peter Sagan (BORA-hansgrohe).
“We were hoping it will come down to a bunch sprint and were keen on trying again after finishing second yesterday," Viviani said. "The guys were absolutely perfect, helping me get over the final climbs, and I was confident in them, because I know we have the best lead-out in the world.
"We took the responsibility in the last kilometres and made sure we were near the front going into the descent because this was very important, Michael [Morkov] put me in a perfect position and I could finish off the job. Today’s victory means a lot to me and makes me extremely happy."
Sagan retains the overall lead, ahead of Matthews by 10 seconds, with Kasper Asgreen (Deceuninck-Quick Step) in third.