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The 11-times UGP winner from England suffered broken bones and underwent surgery on Friday - his injuries are not believed to be life threatening.
Martin lost control of his Tyco BMW at Ireland's corner on the circuit.
He was leading the Superbike race by less than a second from Bruce Anstey when he crashed on the final lap.
"Guy is currently being treated for his injuries in a Belfast hospital, but we expect him to be released within the next few days," said the Tyco team on Friday.
The Lincolnshire rider was also fastest in Superbike practice for the Ulster GP.
Martin clocked 132.23mph in the closing minutes of qualifying at Dundrod earlier on Thursday.
Anstey, who went on to win the Dundrod 150, will be elevated to pole position in Martin's absence after lapping in 132.059.
Isle of Man TT hat-trick hero Ian Hutchinson will start from second on the grid with Peter Hickman third.
Stephen Watson presents coverage of the Dundrod 150 road races exclusively on the BBC iPlayer on Friday evening.
It will include extended highlights of Thursday night's action and there's a preview of Saturday's Ulster Grand Prix.
Guy Martin is out of Saturday's Ulster Grand Prix as he recovers from injuries sustained in a crash during the Dundrod 150 race on Thursday.