Pep Guardiola’s side suffered a 4-3 penalty shoot-out exit after the sides had been deadlocked at 1-1 after 120 minutes and 4-4 on aggregate.
Rodrygo had fired the Spaniards into an early first half lead before Kevin De Bruyne deservedly levelled affairs for City 14 minutes from time.
That sent the tie into extra time and with no further goals resulting it led to the lottery of penalties.
Though Luka Modric saw Real’s first spot-kick saved, Bernardo Silva and Mateo Kovacic also saw their two penalties kept out.
And it presented Antonio Rudiger with the chance to clinch the tie and the Real defender fired home Madrid’s fifth spot-kick to seal a 4-3 shoot-out victory and send the Spanish champions into the last four where they will meet Bayern Munich.
Play the video to watch the best of the action from the Etihad…