The Newcastle legend, hands on hips, could only watch in dismay as his side waved goodbye to the top-flight along with the 4,000 travelling fans in the ground.
Ironically, their exit was compounded by a tragic first-half own goal by Damien Duff which led to Villa achieving only their seventh home win of the season to complete the campaign in sixth spot.
United, who had David Edgar sent off in the last minute for a second booking, fought bravely to the end but they ultimately paid the price for their dismal performances this season when many disastrous off-field decisions finally came home to roost.
Shearer himself never really had a chance as the demise of Newcastle was deeply ingrained to such an extent that they were generally standing on the relegation trap-door even before his return to St James' Park.
The Magpies were in a hungry mood straight from the start but they couldn't steal a goal despite some spirited attempts in the opening exchanges.
Duff saw his low shot tipped around the post by Brad Friedel, while Carlos Cuellar cleared Peter Lovenkrands' effort off the line.
Shortly afterwards a clever flick on by Mark Viduka created a clear-cut chance for his fellow striker, Obafemi Martins, but the Nigerian lofted his shot over the bar.
Villa, who went into the game with only six home wins to their credit, were often caught short by the urgency displayed by Newcastle and struggled to make an impact.
Their best chance to have taken the lead occurred as easily as the second minute when Gabby Agbonlahor headed onto the top of the netting from Gareth Barry.
Later Newcastle were indebted to their goalkeeper Steve Harper for keeping them in the game.
His first save was when he flicked a powerful drive from Craig Gardner over the bar and a minute later bravely kept out a close range effort from Barry.
But Harper was powerless to save when Duff deflected Barry's powerful shot past his luckless goalkeeper in the 38th minute.
Skipper Nicky Butt conceded a corner which Ashley Young crossed for Stiliyan Petrov pushed into the path of Barry to blast Newcastle out of the Premier League.
Butt was at fault in the 70th minute when he put Barry in possession but the Villa skipper, with only Harper to beat, screwed his shot wide of the post.
United's fate should have been sealed beyond doubt in the 79th minute when big John Carew completely missed his kick in front of goal from Agbonlahor's right-wing cross.
Newcastle gallantly strived for the equaliser but there was no real finishing power from either a subdued Viduka or Martins.
They had their chances in the first half but they were wasted - a fitting appraisal of Newcastle's season in general.