The Red Rose had their demotion confirmed to Division Two on day two when they failed to reach a third batting point.
It's a case of what might have been as Lancashire would have stayed up if they had scored 27 more first innings runs, to reach 300, with Nottinghamshire failing to beat Somerset.
The visitors did lose two wickets in two balls during their chase of 113, as Fidel Edwards grabbed his 53rd and 54th wickets of the season.
The fast bowler found the outside of Alex Davies’ bat to edge to a diving Sam Northeast at third slip before producing a bullet delivery to dislodge debutant Brooke Guest’s off-stump.
Keaton Jennings, though, carried over the line in attacking style – carting Kyle Abbott for four boundaries in the first over on his way to an unbeaten 40.
The opener gave Joe Root and the England coaching staff a timely nod before the Test side fly out to Sri Lanka.
Liam Livingstone, 48 not out, added the remaining 73 with Jennings in a bashful style – with the captain completing the eight-wicket victory by smashing Ian Holland over the top of the leg side in successive balls.
Lewis McManus had started the day alongside Kyle Abbott with a lead of 92, but only four runs were added before the first of the two remaining Hampshire wickets fell.
Abbott was bowled by a big in-swinger from Preston-born Tom Bailey for 21.
McManus, now with Edwards, eked Hampshire’s lead over 100 before the West Indian was bowled for 44, again by Bailey – who claimed eight wickets in the match.
The scalp meant Bailey completed the campaign as the highest wicket-taker in Division One, with 64 wickets – seven more than teammate Graham Onions and Essex’s Jamie Porter, who could still overtake him.
Lancashire then knocked off the 113 required for victory in exactly 13 overs.
The defeat means Hampshire will have to wait until after Yorkshire’s match with Worcestershire is concluded to discover whether they finish fourth, for the first time in the club’s history, or fifth.