Target loses its held item, even if this move would cause the target to faint. If this move is used against a Pokémon holding an item that can be lost (even if the actual item loss is prevented), it does 1.5× its usual damage. If this move would trigger that item's effect then that effect will occur before the item is removed (and the item will be consumed rather than removed if it would normally be consumed).
Neither the user nor the target can recover the lost item by any means. Removed items are restored to the target after the battle ends.
If the target is Giratina holding a Griseous Orb, Genesect holding a Drive, Athlauria holding a Gilded Crown or Wilted Crown, a Pokémon with Multitype holding a Plate, or a Pokémon holding its corresponding Mega Stone, it will take damage but not lose its item. The 1.5× damage boost does not apply in these cases. If the target has Sticky Hold and its item would otherwise be lost due to Knock Off, it will keep its item but will still take the extra damage.