Iceland followed Poland's lead in becoming one of the first nations to be relegated form their Nations League Group.
Haris Seferovic and Michael Lang scored both Swiss goals in the second half while debutant goalkeeper Yvon Mvogo made three key saves for the visitors.
Both Switzerland and Belgium have six points, which featured an impressive 6-0 thumping of Iceland in September.
Despite drawing 2-2 with World Cup winners France in Paris midweek, Iceland could not complete their late comeback.
Alfreð Finnbogason got one back for the visitors, however it was not enough for Iceland, ranked 22nd in the world.
Iceland have lost all three games and will consequently finish bottom of the section.
Belgium host Iceland on November 15. before visiting Switzerland in what will be the group's decisive game three days later.