The former Deputy Prime Minister had led in the first round but was narrowly defeated by his Tory rival Matthew Grove when the second preference votes were counted up.
After conceding defeat, the 74-year-old said he did not think he would be fighting any more elections in the future.
Despite officially opposing the policy of Police and Crime Commissioners, Lord Prescott became one of the most high profile candidates when he threw his hat in the ring.
During the campaign he was joined on the trail by former Prime Minister Tony Blair as he had pledged: "Vote for me and I'll put you and fighting crime first."
But the seasoned campaigner, who won his first Westminster election in 1970, failed to convince enough of the Humberside electorate and was defeated by just over 2,000 votes by Mr Grove, a local businessman and Conservative councillor.