Early strikes from Rojo Brajkovic and Mate Antunovic put the hosts two goals to the good before Oscar Bobb halved the deficit moments before half-time.
The Blues pushed for an equaliser throughout the second half but couldn’t find a goal that would take the tie to penalties.
HIGHLIGHTS | Hajduk Split 2-1 City
It’s a tough end to City’s European participation at the first knockout stage after an unbeaten group campaign but Barry-Murphy believes his players tried everything.
He said: “It’s really disappointing and not what we wanted. It will be no comfort to the players but we gave absolutely everything.
“We created a host of chances but we just didn’t actually take them on the day. Split took their two chances and then we were left chasing the game. It’s obviously not a nice feeling at this moment.”
The Poljud Stadium in Split attracted a lot of home fans who were vocal in their support of their side during the game.
Barry-Murphy was delighted with how his players responded to a situation they will have rarely come across in their fledgling careers.
“It’s a brilliant experience. All credit to Split, they came out in their numbers and created a great atmosphere for their players,” he said.
“That was amazing for our players to have to deal with that. I was very proud of them the way they conducted themselves.”
Watch the video at the top of the page to hear Barry-Murphy’s reaction in full...