Today's closing was the lowest level since July 14, 2014 when the index had closed at 25,006.98.
Experts say a strong non-farm payrolls data is expected to allow Federal Reserve to consider a September rate hike.
"The global risk is getting highlighted with the focus mounting on the prospects of a US rate hike soon," said Vinod Nair Head-Fundamental Research, Geojit BNP Paribas Financial.
On a weekly basis, the Sensex lost 1,190.48 points or 4.51 per cent and Nifty fell 346.90 points or 4.33 per cent. This is the fourth straight weekly plunge for both the indices.
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On the day, the NSE Nifty also cracked the 7,700-level.
Gaurav Jain Director of Hem Securities blamed continued selling pressure by the foreign investors, weakness in rupee and global jitters for the sell-off.
The 30-share index stayed in the negative zone for most part of the day and touched a low of 25,119.06 before ending at 25,201.90, a steep fall of 562.88 points or 2.18 per cent.
The broader NSE Nifty also succumbed to all-round selling and slipped below the crucial 7,700-mark to settle the session 167.95 points or 2.15 per cent down at 7,655.05.
In broader markets, small-cap and mid-cap indices closed lower by 2.47 per cent and 1.90 per cent, respectively.
Vedanta was the top Sensex loser, tumbling 4.84 per cent, followed by GAIL 4.73 per cent.
Out of 30-share Sensex pack, 28 fell, while only Bharti Airtel and Coal India managed to buck the trend.
Sectorally, BSE realty index suffered the most by plunging 3.32 per cent, followed by infra 3.24 per cent, power 3.03 per cent, bankex 2.65 per cent, healthcare 2.42 per cent and IT 2.34 per cent.
European markets were also in deep red on anticipations of a strong US jobs data.