Inter Milan 0 Liverpool 1 (Agg: 0-3)
Liverpool ended Inter's Champions League hopes thanks to Fernando Torres' 26th goal of the season to join the Gunners, Manchester United and Chelsea in Friday's quarter-final draw.
Liverpool needed to defend magnificently in the first half but when Nicolas Burdisso was sent off after 50 minutes the visitors men took control and got the goal they needed to make the Italians' task of recovering from a 2-0 first leg deficit an impossible task.
Rafael Benitez's side have been the better team in both legs however and received an ovation not only from their own fans but the home supporters too.
Jamie Carragher played his 100th European match - a new Liverpool record - at right-back to allow Sami Hyypia to return in the centre alongside Martin Skrtel.
Lucas Leiva played in central midfield in place of Xabi Alonso, who stayed on Merseyside to be with his pregnant girlfriend who had gone into labour, with Javier Mascherano also back after a groin problem and the pair turned in an outstanding defensive display.
For a while the gratitude Inter fans feel towards Liverpool shone through this vibrant, passionate occasion as a huge banner was hung above the 5,000 visiting contingent saying "Whatever happens, Istanbul 2005, thank you Liverpool", in reference to that famous victory over hated rivals AC.
Once the banner was taken down the real battle began in an electric atmosphere amid deafening noise.
Inter were desperate for an early breakthrough and it almost came after eight minutes when Jose Reina made a fine save at full-stretch from Julio Cruz's drive from just outside the penalty area.
Crosses flew in, while a string of free-kicks were conceded too close to the box making Liverpool's task even more difficult.
Javier Zanetti was a constant threat down the left while Esteban Cambiasso followed Gerrard everywhere and still had time to keep Inter's play moving relentlessly forward.
Liverpool had their moments, though. One outstanding ball from deep by Fabio Aurelio sent Ryan Babel away behind Inter's defence and keeper Julio Cesar needed to rush out of his box to intervene.
Then a mistake by Cambiasso in his own box let in Torres, who side-stepped one defender and forced Cesar into a crucial block at his near post.
Cruz should have scored after 30 minutes however, racing on to an Ibrahimovic pass only to fire an angled shot just wide of the far post.
Maicon's error from a poor crossfield ball let in Kuyt but his low drive bounced back to him off Nelson Rivas and ricocheted behind.
It was left to Reina to end the first half with another fine save, diving backwards to hold a Cruz flick from Maicon's cross.
Gerrard was booked for a foul on Cambiasso but after 50 minutes Inter were reduced to 10 men when Burdisso received a second booking for a high tackle on Lucas.
Inter, who had Materazzi dismissed at Anfield, had to move Cristian Chivu into a central defensive role and push Zanetti back.
The tension was racked up and Aurelio was next into the book as Inter urged referee Tom Henning Ovrebo to produce cards for seemingly every Liverpool tackle.
Zlatan Ibrahimovic should have scored after an Aurelio error before Rivas was cautioned for body-checking Babel, who was soon to be replaced by Yossi Benayoun.
Inter were being stretched and after 63 minutes Liverpool scored the goal they so desperately needed.
Aurelio won possession on the left and surged forward, feeding Torres on the edge of the box. The Spaniard turned to fire a stunning shot inches inside Cesar's right-hand post to send the Red hordes behind the goal wild.
Dejan Stankovic and then Benayoun found themselves in the referee's book with former Arsenal midfielder Patrick Vieira taken off after 76 minutes and replaced by Pele, the Portuguese 20-year-old.
John Arne Riise and Jermaine Pennant took over from Kuyt and Mascherano as Liverpool saw out time to claim the 12th European Cup quarter-final place in their history.