Van den Hoogenband, 0.34 seconds inside world record schedule at the 50 metre mark, clocked 46.81 seconds, just 0.07 seconds outside the mark of 46.74 set by Alexander Popov of Russia in Gelsenkirchen, Germany in 1994.
The Dutchman, who toppled Popov as Olympic 100 metres freestyle champion at the 2000 Sydney Games and beat Ian Thorpe in the 200 freestyle, slapped the water in frustration at being denied the world mark after coming so close.
Italians Filippo Magnini (47.32) and Christian Galenda (47.77) took the silver and bronze medals.
VDH steers Dutch to relay world record
Van den Hoogenband, who equalled the championship record when he clocked 47.15 in Friday's semi-finals and surpassed that in the final, won the event in 1999 and was silver medallist in 1998 and 2001.
BANNER DAY FOR BRITAIN
Joanne Jackson and Rebecca Cooke completed a one-two for Britain in the women's 400 metres freestyle final at the European short-course championships on Saturday.
Jackson, 17, took the lead from defending champion Eva Risztov of Hungary midway through the race and held off a rousing late challenge from Commonwealth champion Cooke to take the gold in four minutes 04.00 seconds.
It was Britain's third gold of the championships following Mark Foster's victory in the 50 freestyle on Thursday and James Gibson's win in the 100 breaststroke on Friday.
Cooke, silver medallist in Friday's 800 freestyle, took a second silver in 4:04.80, with Spain's Melissa Caballero and Russia's Regina Sytch sharing bronze in 4:05.00.
Risztov, who has already won gold in the 200 butterfly and bronze in the 800 freestyle in Dublin, finished out of the medals in fourth place.
Triple world champion Hannah Stockbauer of Germany and Spain's Erika Villaecija, gold medallist in Friday's 800, both failed to make the final.
The British finished the day by breaking their own national record in the 4x50m women's relay.
European record for Britain's Edmond
VDH looking to finish in style