Real Madrid beat city rivals Atletico 4-2 on penalties to reach the Champions League quarter-finals following an enthralling last-16 tie which ended 2-2 after extra time in a raucous atmosphere at Metropolitano on Wednesday.

Antonio Ruediger converted the winning spot-kick for Real after their second-leg match finished 1-0 to Atletico thanks to an early goal from midfielder Conor Gallagher, while Vinicius Jr. missed a late second-half penalty for Real.

Atletico were fuming after forward Julian Alvarez had his shootout penalty ruled out by the referee. He slipped and his left foot slightly touched the ball before he kicked it with his right foot, making it two touches and invalidating a strike that would have levelled the shootout at 2-2.

Atletico goalkeeper Jan Oblak saved a spot-kick by Lucas Vazquez but Marcos Llorente stroked his effort in off the post, leaving Ruediger to seal victory for defending champions Real who are bidding for a record-extending 16th European Cup win.

The Spanish side will face Arsenal in the last eight.

"In the end, a penalty shootout is a lottery," Real goalkeeper Thibaut Courtois told Spanish TV Movistar Plus.

"I sense that (Alvarez) touched the ball twice and I told the referee. It's not easy to see and it's bad luck for them. "We didn't play our best game but we got through and that's the important thing."

After Real grabbed a 2-1 win in a scrappy first leg at Santiago Bernabeu last week, Atletico started fast when Gallagher scored after 23 seconds, firing in a first-time effort from Rodrigo De Paul's low cross.

Atletico's early goal put Madrid in an uncomfortable position, having to patiently work their way through the hosts' low defensive block.