Contador, the 2007 and 2009 champion, crashed on the 161.5-km 10th stage from Mulhouse and, after struggling on for 20km in an effort to play catch-up, gave up and withdrew to his Tinkoff-Saxo team car.
The Spaniard’s departure deprives the race of another previous winner after 2013 champion Chris Froome (Team Sky) withdrew with fractures to his left wrist and right hand on stage five last Wednesday.
Andy Schleck (Trek Factory Racing), who inherited the 2010 title from Contador following an anti-doping infringement, quit the race with a knee injury last Tuesday, although the Luxembourg rider is a shadow of his former self. None of the remaining riders has won the event.
However, Nibali took a significant step in his bid to succeed Froome in Paris on July 27.
The action was expected to ignite on the concluding climb ahead of today’s rest day.
Nibali, who relinquished the lead on Sunday’s ninth stage to Frenchman Tony Gallopin (Lotto-Belisol), surged to a second Tour stage win to take control of the race.
Gallopin struggled, losing the maillot jaune after a one-day stint.
Stage 11 takes place tomorrow as the race heads for the Alps with the 187.5km route from Besancon to Oyonnax.