The 30-year-old O'Kelly, who has lined out 23 times for both Leinster and Ireland this past season, was dogged by what is termed a "lower abdominal oblique groin injury" since sustaining the blow at the Lions' Welsh camp, prior to take-off for New Zealand.
Having shown signs of recovery and been named amongst the replacements for Saturday's tour opener against Bay of Plenty, O'Kelly was yesterday withdrawn from the panel after the injury flared up again in training - although hopes were high amongst the Lions medical team that he would get over the recurrence.
A dis-illusioned Lions tourist in Australia in 2001 having not made coach Graham Henry's Test team, O'Kelly was forced to be a mid-week "dirt-tracker" behind first-choice England duo Martin Johnson and Danny Grewcock.
The 2005 tour was seen as a golden opportunity for the St Mary's clubman to cement his place as one of the Northern Hemipshere's leading lineout exponents, and to get over the disappointment of four years ago.
Unfortunately, New Zealand '05 will always be a case of what might have been for the Dubliner, who was ruled out of the tour this morning. The Lions have named Wasps and England second row Simon Shaw as O'Kelly's replacement, in the last few hours.
O'Kelly, Ireland's most capped player with 73 appearances under his belt, said: "I am obviously very disappointed that for me the tour is over. I have had this problem for a while but had managed to keep it at bay. I have to be philosophical and accept the judgement of the doctors.
Coach Sir Clive Woodward said: "Mal is a terrific player and it is always very sad when a top class player loses out to injury like this. We spoke after he saw the specialist today and agreed there was no chance of him being fit enough to play and it was better for the tour if a replacement was called out.
"It is very sad for Mal but his attitude has been first class. Even now, he has put the broader interests of the Lions first."
Lions captain Brian O'Driscoll added: "All of us, but perhaps most of all Mal's Irish team mates, are obviously saddened at the news. We've known about his injury but like him hoped it would not flare up like this. It is typical of Mal that he has taken it in the spirit he has."
Earlier today, Lions head doctor James Robson, who is on his fourth tour, having been originally called up for the 1993 visit to New Zealand, earlier: "I think we have unmasked something that might have been going on for a little while and might have contributed to the injury we were presented with a week ago."