Landa, who joined Sky from Astana at the end of last season, was the British's outfit's leader for the Giro and was one of the pre-race favourites to win the pink jersey.
He began the day in eighth place overall, at one minute 18 seconds behind GC leader Gianluca Brambilla, and with his favoured mountain terrain to come he was well-placed to challenge for his first Grand Tour victory.
After being dropped on the first climb of the 219km stage from Campi Bisenzio to Sestola, he fell several minutes behind the peloton, clearly struggling, before quitting the race.
Team Sky's general manager Dave Brailsford explained: "Mikel was ill overnight but we spoke this morning and he started today's stage with the hope of being able to pull through.
"It was pretty clear that the illness had badly affected him and that he wasn't going to be able to continue."
Landa finished third in the Giro last year and Sky had planned their whole race strategy around the Spaniard.
"We are really disappointed for Mikel, who was riding well and looking forward to attacking in the mountains and animating the race," Brailsford said.
Team doctor Inigo Sarriegui said Landa had woken up with abdominal pains.
"It appears as though he has a viral gastroenteritis," Sarriegui said. "We will assess him at the team hotel and then determine the best course of treatment to ensure he recovers as quickly as possible."
(Reporting by Martyn Herman,; Editing by Neville Dalton)
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