Earlier this month Tony Blair, Sir John's successor as prime minister, also attacked Brexit
Former prime minister Sir John Major has said it was a "historic mistake" that a majority of voters opted to leave the European Union.
Sir John, who was leader of the Conservative Party when the UK was negotiating the Maastricht Treaty with its European partners in 1991, said he was concerned the challenges ahead had been underplayed.
The ex-PM told an audience at Chatham House in London that, while the British people had every right to choose to leave the EU, pro-Brexit supporters had left voters expecting an "unreal" and "over optimistic" future.
"I have watched with growing concern as the British people have been led to expect a future that seems to be unreal and over-optimistic," he said.
"Obstacles are brushed aside as of no consequence, whilst opportunities are inflated beyond any reasonable expectation of delivery."
Earlier this month Tony Blair, Sir John's successor as prime minister, also attacked Brexit and urged its critics to "rise up".
Sir John added: "My own experience of international negotiations - and the national self-interest that accompanies them - makes me doubt the rosy confidence being offered to the British people.
"If anyone genuinely believes that Europe will concede all we wish for - and exact no price for doing so - then they are extraordinarily naive.
"The trade negotiations will require statesmanship of a high order. There is a real risk the outcome will fall well below the hopes and expectations that have been raised."
He referred to claims that the EU will extract a price from the UK of up to €60bn (£51bn), saying "the bill will be substantial: billions, not millions, and very unpalatable".
"It will come as a nasty shock to voters who were not forewarned of this - even in the recent White Paper," he added.
Sir John said the consequences will be political fallout, warning the most vulnerable were likely to be hit hardest by the impact of quitting the bloc.
He added: "In voting to leave - we have done the EU great harm. Without the UK, it may change in character, becoming more protectionist and less of a pillar of free trade. Such a Europe would be damaging to British interests."
Brexiteers hit back at Sir John's comments, with Sir Bill Cash telling Sky News: "The British people have spoken and Theresa May is doing an incredibly good job in ensuring that that instruction from the British people is carried out.
"Five hundred MPs went through the lobbies only two weeks ago to endorse that withdrawal. And, quite frankly, I just think John Major is talking through his hat."
A No 10 source responded to the speech, saying: "The Government is determined to make a success of our departure from the European Union and to move beyond the language of leave and remain to unite our country.
"The Prime Minister set out her 12 negotiating objectives for Brexit in January. We have a clear plan to get the best deal for the United Kingdom and are going to get on with the job of delivering it."
(Additional reporting from IRN)