Earnhardt was pushing Hendrick Motorsports team-mate Jimmie Johnson coming out of Turn 4 when they arrived behind the slower tandem of David Gilliland and Robby Gordon, while running in a rain-delayed practice session.
As Johnson seemed to be running out of space while trying to pass the slower cars on the outside, he got off the throttle as did Earnhardt behind him, but Michael Waltrip Racing's Martin Truex Jr, who was trailing the pair, could not avoid running into the back of him while being pushed by Red Bull's Brian Vickers.
Earnhardt lost control of his car after being hit by Truex, ending up crashing against the inside barrier and causing enough damage to his pole-winning car to force a switch to a back-up.
As per NASCAR rules, whenever a driver switches to a back-up car after qualifying, he has to start at the rear of the field. That means Earnhardt will not start Sunday's race from pole position plus he also has to go to the rear for today's Gatorade Duel, where he also had pole position.
"I just really don't know what was going on there," Earnhardt said. "The guys on the inside looked like they were going to stay low and then they started kind of creeping up, and they gave me the impression they were going to be closing the hole on the outside. So Jimmie lifted. And he about wrecked and I got off the gas and there were a couple of guys coming behind me - Truex, and a couple other guys - and just didn't have a chance.
"You've got to pay attention out there, man. If you're going to come out here and race, you need to pay attention."
The Hendrick driver will now run chassis 88-576 in the Duel, the same on that Jeff Gordon raced last year at Talladega in October, finishing eighth.
Truex switched to a back-up car as well and will also go to the rear of the field in his Gatorade Duel, but as his position in the Daytona 500 field had not been set yet in Sunday's qualifying - which only decided the 500 front row and the Duel line-ups - he will not have to go to the rear for the Daytona 500. His starting position will depend on his finishing position in Thursday's duel.
"Just somebody made a bad decision up ahead," Truex said about the incident. "Dale and Jimmie and me and Briankind of had our own two-car deals going there. We were kind of swapping back and forth. We just had caught some guys that were a lot slower then we were.
"For some reason they decided to pull up in front of our little pack coming at them about 20 miles per hour faster than they were going. It's just a shame to tear up racecars in practice... It was easily avoidable by some of the guys out there."
Pole position for the Daytona 500 could now be up for grabs on Thursday's duels, although Jeff Gordon may eventually get it should Earnhardt choose the outside lane for the start, given that technically he remains the polesitter.
Earnhardt's incident is his second during Speedweeks events at Daytona, as he also crashed during Saturday's Budweiser Shootout.
