Juan Esteban Curuchet and Walter Fernando Perez of Argentina scored a major upset in the men's Madison Olympic track cycling race on Tuesday.
Spain's veteran Joan Llaneras and Antonio Tauler won silver while Mikhail Ignatyev and Alexei Markov of Russia took the bronze.
The three teams were the only ones that managed to lap the main bunch during the 200 lap race. Argentina scored a total of eight points, Spain had seven and Russia finished with six points.
World champions Britain, who had been heavily favoured to win with the team of Bradley Wiggins and Mark Cavendish, never managed to pick up enough speed or momentum to lap the bunch and finished far back.
Wiggins, who won gold medals in the team and individual pursuit, had hoped to bag a third gold medal.
Britain's coach Shane Sutton said Wiggins was tired after the team pursuit race on Monday.
'It's a shame for Brad, it's a shame for Mark, but you can't win them all,' Sutton said.
The Madison is a 50-km event of two-man teams who trade turns racing, holding hands to slingshot their teammates ahead when they handoff. Points are given for 10 intermediate sprints and for overall distance completed.
The Argentine duo, who were ninth in Athens and eight in the world championships earlier this year, had managed to gain a lap on the peloton by the halfway point of the race then stayed ahead for the last 25 km.
'We've been keeping a low profile, but you can never rule out Argentina in a race like this," said Perez. "We hit the first bunch and remained in control throughout.'
'We feared Spain's return towards the end,' he added.
Spain's Llaneras ended his last Olympics with his second gold medal. After winning the men's point race on Saturday the 39-year-old cyclist announced he would retire from the sport.