The visitors had a wind advantage in the first half and they used it smartly to take a 14-3 lead into half-time, with replacement flanker David Sherry scoring a timely try.
Had winger David O'Donovan's penalty, from inside his own half, gone over instead of hitting the left upright, Shannon would have closed the gap to 14-9 with over 20 minutes remaining.
But luck was not on the side of the eight-time league winners and Garryowen, the defending champions, were able to motor clear thanks to successive tries from Kieran Lewis, Conan Doyle and the lively Keith Earls.
Conceding that his side were second best on the day, Shannon coach Mick Galwey said: "It was a disappointing day and in fairness to Garryowen they deserved it. We didn't do ourselves justice, that's the bottom line.
"Garryowen were smarter than us, they played better into the wind and held onto the ball in the second half when we needed it.
"In fairness we missed a few tackles, we know we made mistakes. We always say to the boys that if you make mistakes against a team like Garryowen, they'll always punish you."
Winners over Garryowen in a Munster Senior Cup quarter-final and the league proper this season, Shannon competed well in the first half, particularly up front, but Galwey agreed that Sherry's 35th-minute touchdown was crucial for the visitors.
"I thought we were doing well in the first half. The try they got before half-time made a big difference, I think, in that it gave us a bigger hill to climb in the second half.
"We're disappointed but you can't take it away from Garryowen, they turned up today and deserved their win," he added.
This was Galwey's fourth season in charge of Shannon and it will still rank as a successful one for the club, with the Munster Senior Cup and a first ever AIB Cup safely locked away in the trophy cabinet.
With the likes of Andrew Thompson and Colm McMahon in the final stretch of their playing careers, Shannon are going through something of a transitional period with many of the club's All-Ireland Under-20 side of two years ago now trying to bed themselves into the senior set-up.
Indeed, eight of the successful Under-20s have played for Galwey's side this season, including centre Mike Kinsella who only made his senior debut last month.
"We had a lot of young players there today, I think the average age of the team was 23. We've a lot of young players coming through," the Kerryman said.
"We got two trophies under the belt this year but it's disappointing to lose the league because the league's the big one."
Galwey, who guided Shannon to back-to-back league titles in 2005 and 2006, is well-placed to judge how the decider between Garryowen and Cork Constitution will go.
His side beat the two finalists in the league's regulation phase this season and he reckons next Sunday's clash will be 'another huge game.'
"It's the same final as last year. Garryowen went down to Cork last year and won down there, it's a hard place to go.
"I'd imagine both teams will be hungry to win, particularly Cork Con as they haven't won the league for a while. It should make for a great final."