The 33-year-old Swiss second seed went down 6-4 7-6 (7-5) 4-6 7-6 (7-5) to Seppi, who is ranked 46 in the world.

Seppi, 30, had never beaten the 17-time Grand Slam champion in 10 previous meetings and his win ends a 23-match losing streak against top 10 opponents.

"I just tried my best and it was one of my best matches for sure," said Seppi.

It is the first time since 2003 that Federer has failed to reach at least the semi-finals in Melbourne, and extends his run without a Grand Slam title which stretches back to Wimbledon 2012.

"It was just a bad day," he said. "I wish I could have played better, but clearly it was tough losing the first two sets.

"I had chances to get back into it. I let it slip, both times in some ways. I guess I won the wrong points out there today."

Federer enjoyed a revival last year, vying with Novak Djokovic for the number one ranking, and began 2015 with his 83rd career title in Brisbane.

However, there had been signs in his previous match against another Italian, Simone Bolelli, that the Swiss was not at his best as he dropped the opening set.

(BBC)