MADRID - Real Madrid beat city rivals Atletico 4-2 on penalties to reach the Champions League quarterfinals 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.

ALSO READ: Real Madrid maintain pressure in title race after easy win over Rayo Vallecano

"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.

Lackluster performances

Atletico were happy to let their opponents keep possession, confident in their ability to keep them at bay while creating several chances with counter attacks.

Vinicius Jr, Kylian Mbappe, Jude Bellingham and Rodrygo all produced lackluster performances, failing to create opportunities against Atletico's well organized and disciplined defense.

Alvarez was a constant menace on counter attacks, with Courtois making a string of saves to deny the Argentine forward. Real Madrid finally created a chance to equalize in the 70th minute thanks to a brilliant run by Kylian Mbappe.

Atletico defender Clement Lenglet held the France striker from behind and a penalty was awarded but Vinicius blasted his shot over the crossbar.

In the shootout, Mbappe scored first for Real and Jude Bellingham was also on target after Alexander Sorloth had netted Atletico's first.

Alvarez thought he had equalized, but following a VAR review the referee signaled the infringement, leaving the entire stadium confused as it took time for the scoreboard to be corrected.

Atletico never managed to recover and Ruediger scored the winning penalty with a low shot that Oblak got a hand to before the ball deflected off his glove into the back of the net.

READ MORE: Superb Brahim strike gives Real Madrid 2-1 first-leg lead over Atletico

"It hurts because we played a great game," Oblak told Movistar Plus.

"We lacked a little bit of luck, but the way it ended for us with Julian (Alvarez) penalty hurts a lot... It's a disappointing defeat... Heartbreaking."