England stripped off gold medal by disqualification at Commonwealth Games
Knight initially seemed to have secured victory by a thousandth of a second ahead of Canada's Kyra Constantine.
But the hosts were denied a fairy tale end to the athletics programme as judges spotted Jodie Williams' foot straying on the first changeover.
Scotland was promoted to bronze.
Their team of Zoey Clark, Beth Dobbin, Jill Cherry and Nicole Yeargin, rather than England, climbed the podium in front of a half-empty Alexander Stadium when the medal ceremony occurred.
The infringement and decision denied England one of the moments of the Games as Knight, a 400m hurdles specialist, flung out her baton-holding arm to thrust her torso across the line and edge out Constantine by the slimmest of margins.
Constantine's flat personal best is more than one and half seconds faster than Knight's, but after a wait to analyse the photo finish, the England anchor's lunge seemed to have done just enough.
Victoria Ohuruogu, Williams and Ama Pipi, who had competed in the individual final earlier in the day, had done superbly to set Knight up in a promising position.
But while the Alexander Stadium rocked in celebration and the quartet posed for pictures, the officials scrutinised the start of the second leg when Williams' foot strayed out of her lane.
Like Knight's apparent victory, it seemed a matter of millimetres. But it was clear and decisive, and England, who did not appeal, were stripped of their eighth track-and-field gold of the Games.
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