In a tight match, the Magpies edged ahead by five points midway through the final quarter but were unable to hang on and went down by one straight kick.
The 13.7 (85) to 11.13 (79) result leaves the team 14th with a 4-9 win-loss record.
Although the Magpies are still mathematically alive, coach Michael Malthouse believes there is very little margin for error if they are to feature in this season's finals series.
“I didn’t say (to the players) to forget about finals because anything is possible but we’ve made it damn hard for ourselves,” Malthouse said after the match.
With so much at stake, the match was played at an intensity reminiscent of the 2003 fixture in round 21 at the same ground, but on this occasion, the 'Pies were unable to replicate last year's result.
There were 15 lead changes during the course of the match, with just a kick in it for most of the night. Goals were at a premium throughout, with the Magpies feeling the absence of suspended spearhead Chris Tarrant and struggling to take a mark inside their forward 50.
Best for the black and white were skipper Nathan Buckley and Paul Licuria, both with 22 touches, while Josh Fraser, Ryan Lonie and Brodie Holland each booted two goals. For the most part, the Magpies simply didn’t have enough winners on the field.
Sydney kicked the opening goal of the match via Ryan O'Keefe but Collingwood responded with four of the next five to establish a handy 11-point lead, which was the most that separated the teams.
Malthouse thought his players let themselves down at vital stages by deviating from the game plan.
“We didn't do enough right. You can't lose three quarters of football on the scoreboard and win games of footy. It’s a simple fact," Malthouse said.
“I was disappointed in a lot of things today. Nearly every player at some stage broke from the strategies we had in place.”
"We didn't play bad football, but we didn't play well enough to win. I can’t get any consolation out of trying hard and almost winning."
“We had a chance to win at three quarter time and didn’t and that’s disappointing. Last year we didn’t lose games in winning positions and this year we have.”
Collingwood posted the first two goals of the second quarter thanks to Holland and Leon Davis. Nicks got the Swans' nose back in front with his second of the night.
Seven minutes later, Anthony Rocca marked his return from an ankle injury with a goal to give Collingwood a six-point buffer at the long break.
The third quarter saw Buckley stamp his influence on the match, breaking free of the yoke of tagger Brett Kirk to have nine touches. Despite this, Sydney kicked four goals to two in the quarter to head into the final term with a four-point advantage.
The last quarter was a goal-for-goal affair until Tadhg Kennelly and Michael O'Loughlin kicked consecutive majors to edge the Swans ahead by seven points with just five minutes to go.
Collingwood's charge wasn't helped by inaccurate kicking - it posted 2.6 in the final term.
Malthouse says the challenge now exists for the playing group to remain focused on putting in good performances despite the position the club finds itself in on the ladder.
“That's the great test of this team - whether players will hold up or whether players look forward to another pre-season next year.”
Next week, Collingwood hosts Hawthorn at the MCG.
Sydney: 5.2 6.3 10.5 13.7 (85)
Collingwood: 4.1 7.2 9.7 11.13 (79)
Goals: Sydney: Hall, O'Keefe, O'Loughlin 3, Nicks 2, Mathews, Kennelly
Collingwood: Holland, Lonie, Fraser 2, Lokan, Davis, Rocca, Buckley, C Cloke
Best: Sydney: Ball, Kirk, J Bolton, Hall, O'Loughlin, O'Keefe
Collingwood: Buckley, Licuria, Lonie
Injuries: None
Changes: Collingwood: O'Bree (leg) replaced in selected side by Davis
Umpires: Vozzo, McInerney, Goldspink
Crowd: 50,091 at Telstra Stadium
