Nibali attacked late in the race, leading a three-man breakaway on a climb. He tried to ride away from Colombia's Sergio Henao and Poland's Rafal Majka before he and Henao lost control on a descent so fast that the motorcycle carrying a television cameraman struggled to keep up.
Nibali was attended by medical staff after failing to finish the race, a fate that befell more than half the 144 riders on a crash-heavy day in which many suffered technical problems during an early cobblestoned section of the 237.5 km course.
The 31-year-old Nibali has won all three of professional cycling's grand tours - in France, Spain and his native Italy - but has failed to win a medal in three Olympic Games.
He was treated by a local hospital and released, said Fabrizio Marchetti, a spokesman for the Italian Olympic team, in an email. Nibali had not been scheduled to compete in Wednesday's cycling time trial. He plans to return to Italy, Marchetti said.
Gold medallist Greg Van Avermaet of Belgium said many riders had taken chances.
"Everybody was taking risks and some went over the limit," Van Avermaet told reporters. "A lot of guys wanted to go for it."
Ireland's Dan Martin said the race was one of the toughest he had taken part in.
"It was the most difficult day on the bike I've had in my career," he said after finishing 13th. "It was just a brutal, brutal day."
U.S. rider Brent Bookwalter went even further.
"It was anarchy out there," he said. "Everything happened. People crashing, flatting, getting gapped out in the wind. It was a very hard day."
(Reporting by Scott Malone; Aditional reporting by Martyn Herman; Editing by Ed Osmond and Bill Rigby)
