Upon DNA damage, cell cycle progression is temporally blocked to avoid propagation of mutations. While transformed cells largely maintain the competence to recover from a cell cycle arrest, untransformed cells past the G1/S transition lose mitotic inducers, and thus the ability to resume cell division. This permanent cell cycle exit depends on p21, p53, and APC/CCdh1. However, when and how permanent cell cycle exit occurs remains unclear. Here, we have investigated the cell cycle response to DNA damage in single cells that express Cyclin B1 fused to eYFP at the endogenous locus. We find that upon DNA damage Cyclin B1-eYFP continues to accumulate up to a threshold level, which is reached only in G2 phase. Above this threshold, a p21 and p53-dependent nuclear translocation required for APC/CCdh1-mediated Cyclin B1-eYFP degradation is initiated. Thus, cell cycle exit is decoupled from activation of the DNA damage response in a manner that correlates to Cyclin B1 levels, suggesting that G2 activities directly feed into the decision for cell cycle exit. Once Cyclin B1-eYFP nuclear translocation occurs, checkpoint inhibition can no longer promote mitotic entry or re-expression of mitotic inducers, suggesting that nuclear translocation of Cyclin B1 marks the restriction point for permanent cell cycle exit in G2 phase.