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.
After congratulating his rival, Lord Prescott claimed he had done well to make it such a narrow race.
He explained: "I said at the beginning, this a Tory marginal seat. It's not a safe Labour seat. It's not even a Labour seat.
"I got nearly got it, didn't I? It would have been nice but it wasn't so. The people have spoken."
He said: "I've always been winning but I knew when I started it was a marginal seat. But it's nothing to be defeated in a democracy, is it?
"I've done what I have to do. I've put Labour's case, I think I've put it effectively, and I've missed it by a couple of cents."
Asked if he would be putting himself up for election again he replied: "I've always been in public service rather than anywhere else. And I don't think I'll be standing for election, no."
