Dortmund need to win to guarantee a first title in 11 years but couldn't deal with the pressure early on at the Westfalenstadion.
Two points ahead of Bayern Munich heading into the final match day, Dortmund just need to match their rival's result.
That was made slightly more difficult when Kingsley Coman put Bayern 1-0 up early against FC Koln, but Dormtund then shot themselves in the foot - three times to be precise.
First going a goal down to Andreas Hanche-Olsen with some poor defending, BVB were then gifted a penalty, but made the bizarre choice to give the spot kick to Sebastien Haller who is yet to take one for the side.
He saw his effort saved in the 19th minute, and five minutes later Karim Onisiwo made it two as Dortmund's players knees began shaking.
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The cameras panned to former Liverpool man Emre Can, who had his shirt pulled over his face, while manager Edin Terzic looked beside himself on the touchline.
Meanwhile, an injured Jude Bellingham could only hand out water from the bench as Dortmund crumbled without him.
The German giants are left with 45 minutes to avoid a historic collapse.