Isaac Buckley’s second half strike reduced the deficit after Borja Mayoral’s brace before Achraf Hakimi struck late on to confirm the young Blues’ exit.
The two sides exchanged changes in the opening period of the game with both coming close to opening the scoring. First, Daniel Grimshaw denied Aleix Febas before Madrid shot stopper Luca Zidane acrobatically saved from Aleix Garcia.
The 18-year old, who made his first team debut on Sunday against Chelsea in the FA Cup, then fired narrowly over the crossbar from the edge of the area as City ramped up the pressure.
With 21 minutes on the clock, Buckley managed to get in behind the hosts defence but Dani Fernandez recovered well and blocked the shot before it troubled Zidane.
City ‘keeper Grimshaw then pulled off a fantastic save to deny Mayoral from close range before José Carlos Lazo somehow managed to put the rebound wide.
However, Grimshaw couldn’t do anything about Madrid’s first goal of the game when Fernandez squared for Mayoral to slot home from close range to give the home side the lead.
The advantage was doubled in the 40th minute as Mayoral notched his seventh goal in the UEFA Youth League with a magnificence individual effort.
The Spanish youth international picked the ball up around 25 yards from goal and spun past two City defenders before burying a shot in the back of the net for 2-0.
Simon Davies made two changes at half time with David Faupala and Brahim Diaz coming on for Aaron Nemane.
The change brought a change of shape with Lukas Nmecha swapping positions with Buckley, who moved from the right wing to the lone striker role.
Angelino had the young Blues first chance of the second 45 minutes, driving straight at Zidane before the son of Real Madrid manager Zinedine acrobatically tipped over Nmecha’s shot on the turn.
City pulled a goal back midway through the first half after a great run down the right from Demeaco Duhaney. The 17-year old burst down the flank and drove into the area before squaring for Buckley, who finished with aplomb to reduce the deficit and hand City a lifeline.
Davies’ side continued to send waves of attacks forward but couldn’t find a way past a stubborn Madrid defence. Tosin Adarabioyo came closest in the 69th minute when he headed just wide from Garcia’s floated corner.
With City pushing further forward in the latter stages, Real managed to add a third on the counter attack with four minutes to play. The ball was fed out wide to Achraf Hakimi, who drove into the area and fired into the back of the net off the underside of the crossbar for 3-1.
The match ended on a sour note for the young Blues with Angelino being dismissed for a foul on Aleix Febas a minute before the end as City’s UEFA Youth League exit was confirmed moments after the sending off.
