The England left-hander looked all set to become the first man in the county’s history to score double centuries in successive first-class innings.
But he was out for 199 for the second time in his career on day three of the County Championship match against Sussex at Headingley, which the visitors closed on 38-0 in their second innings, 207 behind.
Malan had scored a career-best 219 in his previous first-class innings for Yorkshire against Derbyshire at Headingley last August.
The 33-year-old left-hander, who played superbly again, would have joined an exclusive back-to-back double hundreds club that includes Don Bradman, Wally Hammond and Virat Kohli.
Malan - who also hit 199 for Middlesex against Derbyshire at Derby in 2019 - was bowled by the Sussex off-spinner Jack Carson, who spun one across his body to knock back the off stump in glorious sunshine in Leeds.
There was briefly stunned silence from the 1,500 crowd, who then broke out into warm applause for Malan as he left the field.
Malan’s departure left Yorkshire 459-6 in reply to Sussex’s first innings score of 313.
Having helped Malan to add 57 for the sixth-wicket, Harry Duke, the 19-year-old wicketkeeper, shared 76 with Jordan Thompson.
Duke, playing only his third first-class game, progressed to his second half-century before he fell just after tea, lbw to Jamie Atkins for 54 from 97 balls with six fours.
Thompson was eighth out at 542 when he drove Atkins to Stuart Meaker at mid-off, having struck 42 from 72 balls with six fours and a six.
Carson had the Yorkshire captain Steve Patterson caught-and-bowled for eight, and the innings ended at 558 when Atkins captured his fifth wicket for a career-best 5-98, bowling Ben Coad for a single.
Yorkshire’s total was their highest in first-class cricket for a little over five years.
Earlier, after Lancashire’s defeat to Glamorgan in Cardiff this morning, the Red Rose county’s first of the season, Yorkshire knew that they could close the gap on them to four points at the top of the table if they go on to achieve victory here.
Yorkshire began the day on 272-2, with Malan on 103 and Gary Ballance 74, their third-wicket stand worth 177.
Thoughts that it might extend past Yorkshire’s record for the third wicket against Sussex (208 by Vic Wilson and Ted Lester at this ground in 1949) were dashed, however, when Ballance fell in the day’s fourth over, caught behind pushing forward to Carson.
Ballance, who scored 77 from 92 balls with eight fours, had survived a very adjacent-looking lbw appeal from Carson’s previous ball, his dismissal ending the partnership at 180 and leaving Yorkshire 275-2.
Enter Harry Brook, who started, as he so often does, with a flurry of handsome strokes.
Every bowler suffered at the hands of the young right-hander - including Carson, whom Brook off-drove for four and then whipped for four through mid-wicket.
Malan played watchfully and perhaps within himself during the first hour but blossomed against the second new ball, finding the boundary more often en route to his 150 from 227 balls with 18 fours and a six.
Both batsmen took two fours off a Henry Crocombe over that disappeared for 17 as Sussex’s lack of experience showed.
As well as Brook has played this season, he had only two first-class hundreds in 40 appearances going into the game, and he missed out on another good opportunity to register his third.
The 22-year-old was within one run of a sixth Championship half-century in 14 innings this season when he was caught behind down the leg-side trying to glance Atkins, Brook’s 49 coming from 54 balls with nine fours and leaving Yorkshire 374-5, ending a partnership of 99 with Malan.
At lunch, Yorkshire were 392-4, with Malan on 162 and Dominic Bess on two.
Bess fell in the third over after the interval, caught behind for eight as he defended a delivery from Stuart Meaker.
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