Man City's hopes of winning the competition for the ninth time were ended by a narrow 2-1 loss at the Tottenham Hotspur Stadium.
Timo Werner and Pape Sarr gave Tottenham a two-goal cushion, before Matheus Nunes pulled a goal back in first-half stoppage time.
Man City ultimately failed to find an equaliser in the second period as they missed out on a quarter-final appearance for the third time in four seasons.
Man City handed Savinho injury concern
To compound Man City's woes, they were handed a couple of fresh injury concerns on Wednesday evening, including one for Brazilian winger Savinho.
The attacker had to be stretchered off just after the hour mark after he appeared to pick up an issue when trying to cross the ball.
The Brazil international required medical attention on the pitch before he was taken off on a stretcher in visible discomfort.
Speaking about Savinho after the game, Pep Guardiola told reporters: "He had a knock in the 18-yard box but we will see tomorrow what happened.
"We have to see if it was just a knock or something else. It was on the bone, so hopefully nothing dangerous, but we will have to see tomorrow.
Akanji adds to Man City's injury concerns
In addition to Savinho, Man City will have to assess Manuel Akanji after the defender picked up an injury in the warm-up.
Akanji picked up a calf issue and was subsequently assessed by Man City's medical staff before it was decided he would not be fit to start.
As a result, Ruben Dias was brought into the side to feature in the backline with Rico Lewis, John Stones and Nathan Ake.
Commenting on Akanji's withdrawal, Guardiola said: "It's tough. Akanji felt something in the muscular part of his body - he wanted to take a risk, but we said no, no risk."
Guardiola will hope Savinho and Akanji can make a swift recovery, with the Man City boss already having to cope without Rodri, Jeremy Doku, Jack Grealish, Kyle Walker, Kevin De Bruyne and Oscar Bobb.