The victory brings to an end the desire of the north Africans to defend their title won two years ago in Egypt.
Algeria has thus become the second big gun to leave the competition after Ghana.
The Elephants produced a dominant performance in Douala to sink the reigning champions with goals from Franck Yannick Kessie, Ibrahim Sangare, and Nicolas Pepe.
Cote d’Ivoire dominated possession with AC Milan midfielder Kessi, Jean Micheal Seri and young Ibrahima Sangare pulling the strings for Patrice Beaumelle’s side.
The Elephants marauding left-back Chislain Konan twice found space inside the Algeria box. Konan beat Algeria’s Atal on the right to play in Pepe whose first-time effort missed the target on 7 minutes.
The Elephants continue to counter the Desert Foxes with their wide players giving them width as they pushed for the breakthrough.
Kessie broke the deadlock with a clinical strike after an exchange of passes with Pepe to beat Rais Mbolhi and give Cote d’Ivoire the lead on 22 minutes. Djamel Belmadi’s side responded with chances of their own as they push for the equaliser.
Ibrahim Sangare doubled the lead for the Elephants with a thumping header past Mbolhi five minutes before the break.
Cote d’Ivoire continued to dominate the second half and they found the third goal on 53 minutes through Pepe.
The winger drifted inside from the right to curl his left-footed strike past Mbolhi to make it 3-0.
Algeria was awarded a penalty following a foul on Belaili in 57 minutes. Captain Riyad Mahrez struck the post as Cote d’Ivoire hang on to their three-goal advantage.
Substitute Soufiane Bendebka pulled a goal back for the Desert Foxes but it was too late for the 2019 African champions.