The defeat for the Michael Robinson-coached team will see Papua New Guinea meet Trinidad and Tobago in the playoff for fifth place next Monday.
“It was a disappointing game for us tonight,” Robinson said.
“We conceded an early goal and it is very difficult to lift morale in that situation against a quality side.”
Turkey scored just six minutes into the match after goalkeeper Catherine Romai was beaten by an Eda Duran shot.
They doubled the lead when Hilal Baskol swerved an unstoppable free kick beyond Ramoi on 52 minutes.
Nazmiye Aytop heaped further misery on Papua New Guinea when she scored twice during injury time to give Turkey a commanding 4-0 win.
Victory gave Turkey top spot in Group A and earned the Europeans a semi-final showdown with Chile, who lost 4-1 to Equatorial Guinea.
Doubles by Felicidad Avomo and Judit Ndong for Equatorial Guinea cancelled out a Chile equaliser scored by Romina Orellana on 35 minutes.
Trinidad and Tobago, bottom of Group B , meet Papua New Guinea in the playoff for fifth place.
Oceania’s hopes of a Youth Olympic football medal now rely on the Vanuatu U-15 men, who face Haiti on Thursday.
A draw will be enough to send Vanuatu to the semi-finals where they will play either Singapore or Montenegro.
Defeat will see Vanuatu play Zimbabwe in the fifth place playoff.
Results
Wednesday 18 August
Equatorial Guinea 4-1 Chile
Papua New Guinea 0-4 Turkey
Semi Finals
Saturday 21 August
Equatorial Guinea vs Iran
Turkey vs Chile
Playoff for fifth
Monday 23 August
Papua New Guinea vs Trinidad and Tobago