The Bairns favourites to win the league and return to the Championship, required just two points from their final six matches to secure a top-four place.
When League One returned from the shutdown in March Falkirk held a two-point lead over Cove Rangers and had a six point advantage over eventual winners Partick Thistle. They won, however, just three of 11 matches.
Gary Holt, who took interim charge following the sacking of Lee Miller and David McCracken, saw his side slip to a 2-0 defeat at Airdrieonians.
An 88th minute strike from Craig Thomson was followed by a stoppage time goal from Kyle Turner which allowed the Diamonds to finish second.
The result, coupled with Montrose’s topsy turvy 3-2 win over Partick Thistle, saw the Bairns drop to fifth.
Stewart Petrie’s men took the lead through Martin Rennie and then again through Russell McLean but were pegged back twice, first Ross MacIver then Joe Cardle.
However, Cammy Ballantyne was the hero with an 87th minute goal from a McLean assist and the team will now face Greenock Morton.
Cove will play Airdrie in the other play-off.
At the bottom, Dumbarton gave themselves hope of surviving the relegation play-off spot thanks to an entertaining 3-2 victory over Peterhead.
The visitors led 2-1 at the Rock going into the last ten minutes before Morgyn Neill and Jamie Wilson secured the three points which took them to eighth.
It will now come down to Clyde's clash with East Fife with Danny Lennon’s men trailing Dumbarton by two points.