The German, who has won five stages in this year’s Tour, crashed early on in Wednesday’s stage before the first climb of the Col d’Ornon, damaging his right shoulder.
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Kittel led the green jersey standings going into stage 17, with a close fought battle ensuing over the points competition with Australian Michael Matthews (Sunweb), with the fight for the classification set to come down to the final two sprint stages on Friday and Sunday.
The green will now pass to Matthews, who was just nine points behind Kittel after taking the intermediate points on stage 17, with second place André Greipel still way back in second place.
29-year-old Kittel was brought down in a multi-ride pile-up with 164km to go in the 183km stage, which passes four categorised climbs including the Col de la Croix de Fer, the Col du Télégraph and the Col du Galibier en route to the finish in Serre-Chevalier.
British champion Steve Cummings (Dimension Data) was also brought down in the crash, as he veered into a field to avoid hitting riders in front of him.
Kittel was the second high profile rider to abandon the Tour on the 17th stage, with Thibaut Pinot throwing in the towel on the Croix de Fer and leaving his FDJ team with just three riders left in the race.
Quick-Step will now rally round Dan Martin after the loss of Kittel, who is looking to regain time on GC after slipping and losing 51 seconds in the crosswinds on stage 16.