Liverpool are out of the Champions League after a dramatic 3-2 defeat to Atletico Madrid saw them eliminated 4-2 on aggregate after extra-time.
After Georginio Wijnaldum's opener, Roberto Firmino's extra-time goal appeared to have put Jurgen Klopp's side into the quarter-finals but Marcos Llorente changed all that.
The substitute capitalised on a poor kick by Adrian in the 97th minute to stun Anfield and then added a second soon after to leave Liverpool needing two goals. Instead, fellow substitute Alvaro Morata added a third Atletico goal to dump the defending European champions out of the competition.
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It was an extraordinary result for Diego Simeone's side who, for all their high-quality defending, were outplayed for much of the evening by the runaway Premier League leaders.
The 30-year wait for that title will soon come to an end but Liverpool's grip on this one is over.
Liverpool: Adrian (4), Alexander-Arnold (7), Gomez (6), Van Dijk (7), Robertson (6), Henderson (6), Oxlade-Chamberlain (8), Wijnaldum (8), Salah (6), Firmino (7), Mane (6).
Subs: Milner (6), Origi (6), Minamino (6).
Atletico Madrid: Oblak (8), Trippier (6), Savic (7), Felipe (8), Renan Lodi (6), Koke (6), Saul (6), Partey (8), Correa (6), Felix (7), Costa(6).
Subs: Llorente (8), Vrsaljko (6), Morata (6).
Man of the match: Marcos Llorente
How Liverpool were knocked out
Liverpool knew they had a huge task on their hands coming into this one but so did the Anfield crowd and there was a raucous atmosphere at kick-off as the drizzle came down.
It did not take long for Atletico to remind everyone how precarious the reigning champions' position was when Diego Costa fired just wide of the near post after only 14 seconds.
But Liverpool were soon into their groove and dominated possession throughout the first half with Mohamed Salah and Sadio Mane both combining to get shots away.
Even before the opening goal, the best weapon looked to be the overload on the right wing where Alex Oxlade-Chamberlain was enjoying himself alongside Trent Alexander-Arnold.
While the full-back's steady stream of crosses were repelled by the Atletico defence, they could do nothing to stop Oxlade-Chamberlain finding Wijnaldum late in the half.
The Dutch midfielder was one of the architects of Liverpool's memorable comeback against Barcelona last season and Jan Oblak could only watch his powerful header sail into the net.
Liverpool's recent form has been troubling, having lost their last three away games and only edged past West Ham and Bournemouth here, but Anfield transforms on nights like this.
Every tackle was cheered. Every opposition indiscretion - often courtesy of Costa - was jeered. But even with the momentum on their side, the tie was in the balance.
One passage of play revealed that much early in the second half. Firstly, Firmino was denied by Oblak at one end before Joao Felix tested Adrian at the other.
Midway through the half, Liverpool thought they had the lead in the tie when Andrew Robertson got his head to Salah's deflected shot but the ball came back off the bar.
The attacks kept coming and with Costa having been substituted for Llorente, much to the delight of Anfield, Simeone's side did not seem to have a way of alleviating the pressure.
Liverpool made two changes to the team that beat Bournemouth at the weekend with Andrew Robertson returning to replace James Milner at left-back and captain Jordan Henderson recovering from injury to take the place of Fabinho in midfield.
Atletico turned to Diego Costa with the former Chelsea striker awarded his first start since November. Alvaro Morata dropped to the bench. Kieran Trippier continued at right-back having missed the first leg in Madrid, while Joao Felix was also fit to start up front.
But the clock kept ticking and Klopp, aware of the risk, withdrew the excellent Oxlade-Chamberlain in favour of James Milner. Still, the chances continued to fall to Liverpool.
Mane might have taken the roof off the Kop had his overhead kick found the net with five minutes remaining. Salah went close to doing the same but he too blasted over the bar.
This was a dominant display but the decisive blow briefly looked to have come from Atletico when Saul Niguez headed home in stoppage time from a left-wing free-kick.
Saul was well offside, although it took the away bench some time to realise it, and Anfield breathed again as the crowd steeled themselves for extra-time.
Wijnaldum, as so often, was the driving force for the second goal. After forcing yet another save from Oblak himself, he powered down the right wing and crossed perfectly for Firmino.
The Brazilian saw his header come back off the post but the ball fell nicely for him on the rebound and he showed composure to slot home his first Anfield goal since April.
That looked to be that but Adrian's error dramatically changed the mood.
The goalkeeper, in for the injured Alisson, miskicked straight to Joao Felix and when he fed Llorente, the substitute was able to score low into the far corner of the net, with a slip preventing Adrian from getting anywhere near it.
Liverpool regrouped but then came the hammer blow when Morata, just on the pitch, broke clear and squared for Llorente to finish brilliantly beyond Adrian once more.
Klopp could hardly believe what he was witnessing as suddenly his side needed two goals with only 15 minutes remaining and try as they might even the first would not come.
Instead, with hope gone, Morata raced through in stoppage time to complete the turnaround on the night as Atletico completed an outrageous 3-2 victory to progress. Anfield still applauded their team off at the final whistle, but this was a crushing defeat.
What the manager said...
Liverpool boss Jurgen Klopp: "I think everybody who saw the game tonight will know that it could have been different. I loved our first 90 minutes. Our mistake tonight was that we scored the second goal too late. We scored in extra-time instead of the 90 minutes and that was our fault.
"When you see a team like Atletico, packed with world-class players, and they play the way they play, it's the most difficult thing to face. That's how it is.
"But we did exactly what we had to do I loved the way we played. I loved how we used the spaces, the triangles, how we passed the ball and came to the finishes. The first goal was a super goal. We caused them more problems than people probably thought we would cause them after the first game. To cause a team like that so many problems, I loved that.
"We score the second goal and then everyone sees their first goal. The pass was not really helpful. Adrian is a lovely ball but in this moment he makes the wrong decision. Is it necessary they finish the situation? No. But Adrian is still on the way back so it was easy to finish that situation, I would say.
"In that moment, usually conceding a goal is part of football and shouldn't have a massive influence. But in this moment, the momentum changed. Before that, Madrid were wondering how they should cope. Before that, everything felt natural for us. Then we became a bit stiff and they became a bit fresher in the legs. They score two goals.
"I am a really under-average loser, to be honest, at least tonight. I could say a lot of things and I would look like the worst loser in the world. The way they play I just don't get it. But the winner is right. That is how it is."
Analysis: Tale of two keepers
Sky Sports' Neil Mellor...
"Liverpool have put an awful lot into that performance and it was a very good performance. They created chance after chance. Oblak is one of the best goalkeepers in the world, and he showed that tonight.
"The best goalkeeper in the world was missing for Liverpool and they missed him tonight. I think that was the big difference. Liverpool were missing Alisson. If he was in goal, would Liverpool have progressed?"
Liverpool's misery in stats
- This was the first time Liverpool have failed to progress from a two-legged tie in European competition under Jurgen Klopp, having previously been successful in each of the previous 10.
- Liverpool have lost a home European game at Anfield for the first time under Jurgen Klopp - with this their first defeat at home in Europe since October 2014.
- Liverpool have fallen at the last 16 stage of the Champions League for the first time since 2006, also as the reigning champions after lifting the trophy in 2005 at this season's final destination - Istanbul.
- This was the first ever Champions League game to see four goals scored in extra time.
- Since the start of the 2017-18 campaign, Liverpool's goalkeepers have made more errors leading to goals in the Champions League than any other team's keepers in this period.
Liverpool go to Everton on Monday Night Football, live on Sky Sports Premier League at 8pm, while Atletico go to Athletic Bilbao at 3pm on Sunday in La Liga.
The draw for the Champions League quarter-finals will be held on March 20 at 11am.