Susann Müller and Evgenija Minevskaja scored five each as Germany's two right backs paved the way for Germany to the main round in Zagreb after beating Croatia 26:24 in Group C on Wednesday.
Germany's win also means that Sweden and Netherlands reach the next stage, while Croatia's campaign will inevitably end on Friday.
This is the first time a hosts misses a Women's EHF EURO Main Round since it was implemented in 2002.
"I am very disappointed, I cried. We played our home championship and it is a big surprise that we will not go to the next round," said Croatia's Andrea Penezic.
"We knew that we have to win, we did not have the necessary luck. We gave everything and we fought a lot. But it was impossible to win today."
The 30:30-draw in the day's earlier match between Sweden and the Netherlands had turned the game between Croatia and Germany into a "do-or-die" affair.
Both teams were aware that an early knock-out was possible, and the match started in breathtaking pace.
Germany fielded an interesting line-up at the beginning with neither new arrival Susann Müller nor goalkeeper Clara Woltering in the starting seven. Woltering had produced a spectacular performance in the first match against the Netherlands on Monday.
Both teams scored goal after goal in the opening minutes and it did not take long until Susann Müller was sent on court and scored her first EHF EURO goal to make it 6:6 after 12 minutes.
Just before a crucial moment happened on the other end of the court as instrumental Croatian playmaker Miranda Tatari twisted her knee and had to be carried off the court with what appeared to be a season-ending injury.
Her team reacted as good as they could and kept Germany scoreless for nine minutes.
During this span Croatia was pushed by a great scoring show of Andrea Penezic into a three-goal lead (13:10) and it could have been even bigger if Kristina Elez had hit the back of the net and not the right post of Katja Schülke's goal.
The German goalkeeper proved to be a worthy replacement for Woltering accumulating 10 saves in the first half.
However, Germany bounced back and finished the first-half with a nice long pass by Schülke and even a nicer finish of Svenja Huber to close the gap to just one goal (14:13).
In the second half Marta Zderic in the Croatian goal collected several impressive saves and helped her team to stay in the game - however just eight minutes into the second half Croatia suffered another blow when Katarina Jezic had to leave the court with an injury.
Penezic scored her eleventh goal of the game in the 52nd minute to level the game at 22:22 after Germany had enjoyed a number of one-goal leads, but it looked as if the injuries to Tatari and Jezic were taking its toll.
Penezic, who was awarded as the best Croatian player, continued to score and finished the game on 13 goals, but Germany increased their lead to three goals (26:23) with three minutes remaining and eventually the fate of the EHF EURO co-hosts had been sealed.
"It was ups and downs all the time. I trembled until the final whistle. But actually when we were leading 26:23 I felt that had to be it," said Germany's goalkeeper Katja Schülke.