Serena Williams has won 23 Grand Slam singles titles, the second most in tennis history
Williams, who turns 41 this month, expects it to be her final match.
It will end a 27-year professional career that brought 23 major singles wins and sees the American widely labelled as the greatest of all time.
Williams fought back from a set down but ended up losing 7-5 6-7 (4-7) 6-1.
The former long-time world number one saved five match points in what proved to be the final game but was powerless to stop a sixth.
Almost everyone who could rose to their feet when she departed the court on Arthur Ashe Stadium - the scene of her first major triumph in 1999 and five more of the finest wins of her storied career - for what she expects to be the last time.
As she waved goodbye and gave a signature twirl, Tina Turner's pop classic 'Simply The Best' boomed out over the sound system.
Asked if she would reconsider retiring after her performances this week, Williams said: "I'm literally playing my way into this and getting better. I should have started sooner this year. I don't think so, but you never know."
Williams had tears streaming down her face when she was interviewed in the middle of the court, thanking her family, team, the crowd and her fans across the world for their support over the years.
"I thank everyone that's here, that's been on my side so many years, decades. Oh my gosh, literally decades," said Williams, who played her first professional tournament as a 14-year-old in 1995.
"But it all started with my parents. And they deserve everything. So I'm really grateful for them.
"And I wouldn't be Serena if there wasn't [sister] Venus, so thank you, Venus. She's the only reason that Serena Williams ever existed."
Tomljanovic, who moves into the fourth round and plays Russia's Liudmila Samsonova, stepped to the side and applauded her opponent as she took the microphone.
The world number 46 produced a phenomenal performance to block out the noise and sense of occasion, illustrated by her clinical hitting in the final stages of a brutal contest which lasted three hours and five minutes.
Williams has long been more than a tennis player and it was a sign of her status - as an American icon and one of the world's most recognisable sport stars - that she announced her retirement in an essay for glossy fashion magazine Vogue.
Although the former world number one did not use the word retirement itself, preferring to say she was "evolving away" from the sport, her plan is to end her glittering career this fortnight at her home major.
Like every night she has appeared this week, Williams emerged on to court after being introduced as the 'Queen of Queen's' - the district of New York where the tournament is held - in a specially-commissioned video montage narrated by American rap star Queen Latifah.
The A-Listers have been out in force on Ashe this week, with Vogue editor Anna Wintour and golf superstar Tiger Woods previously sitting in Williams' box.
On Friday night it was R&B singer Ciara and her husband Russell Wilson, who is one of the country's biggest NFL stars, alongside members of Williams' family.
Elsewhere, tennis great Billie Jean King, film director Spike Lee and actress Rebel Wilson were also watching.
Williams wore the glittery, figure skating-inspired dress she had specially created for the tournament, along with diamond-encrusted trainers, to add further pomp to the occasion.
Right to the end, Williams put on a show for the almost capacity 24,000 crowd.
The 40-year-old played some of her best tennis in a long while as she fought to prolong her career, putting on one final memorable show for those lucky enough to witness it.
-- Courtesy of BBC Sport