Lionel Messi and Neymar were far from at their best in the defeat, although Kylian Mbappe had given Mauricio Pochettino’s side the lead in Manchester against the run of play prior to City turning the game on its head.
Elsewhere, a host of teams including Real Madrid, Inter and Sporting Lisbon booked their slots in the Round of 16, but the latter’s progress was at the expense of Borussia Dortmund – who will have to be content with a place in the Europa League.
While Liverpool have progressed to the Round of 16 convincingly, all three other teams in the group – Atletico Madrid, Porto and Milan – have their hopes in the balance going into the final round of action.
Here are the five standout games from a busy night in Europe’s premier club competition.
With the future of Mauricio Pochettino appearing increasingly uncertain amid continued links to Manchester United, his side were second-best against the blue half of Manchester.
The hosts dominated the first half at the Etihad and while Mbappe gave PSG the lead after Messi’s cut back came off the back of a defender goals from Raheem Sterling and Gabriel Jesus saw justice was done.
Despite Mbappe netting from Messi’s play, the attacking trident including Neymar presented more problems than solutions for PSG, with the front three cut off from the rest of the team.
Each of the superstar attacking players are devastating on their day but their resistance to contributing to a defensive shape too often leaves PSG short at the back.
PSG and City have progressed through the group, but the Parisian club’s problems are illustrated by not winning any of their three matches away from home in the group stage.
Ajax striker Sebastien Haller was already one of the stories of the Champions League season, having bagged four goals on his competition debut against Sporting Lisbon in Portugal.
He also netted in each of the following matches against Besiktas and both clashes with Borussia Dortmund, before finding the target again in Istanbul on Wednesday.
In fact, Haller netted twice as Ajax won 2-1 to seal top spot in Group C with a round of games remaining taking his personal tally up to nine goals in his opening five matches.
That is a competition record no other player has scored that many goals in their first five games in the Champions League, with Erling Haaland holding the previous record with eight goals.
Pedro Golcaves netted a double for the hosts with Pedro Porro also on target, with Donyell Malen netting a late consolation goal, who will join group winners Ajax in the last 16 of the competition, with Dortmund condemned to the Europa League.
Emre Can was sent-off for Dortmund in the second half as it all went wrong for Marco Rose’s team, who had won their first two matches in the group but have lost every game since.
Sporting meanwhile are through to the knockout stages of the competition for the first time since 2009!
Italian giants Milan had picked up just one point from their opening four Champions League group stage games but secured a dramatic late win at Atletico Madrid to keep their hopes alive.
Junior Messias grabbed the late winner at the Wanda Metropolitano, meaning that the Rossoneri have drawn level with Atleti on four points – but both are still positioned to go out of the competition.
Each side trails Porto by one point going into the final round of games, with the Portuguese side hosting Atletico on the final matchday as Milan play host to Liverpool.
Two big hitters are set to be eliminated from this one, but Porto hold the slight advantage going into the final day.
Moldovan champions FC Sheriff Tiraspol were the underdog story of not just this Champions League season, but arguably any.
Sheriff beat Shakhtar Donestk in their first game before a stunning last-minute victory away at Real Madrid, but they will be playing in the Europa League knockouts in early 2022.
That is because Inter and Real Madrid have both booked their qualification spots from Group D with a game to spare.
Goals from David Alaba, Toni Kroos and Karim Benzema gave Los Blancos a three-goal victory in Moldova to ensure there was no repeat of that stunning scoreline in Madrid.
Earlier in the evening, Inter secured their passage to the Champions League knockouts for the first time in a decade as a double from Edin Dzeko saw them defeat Shakhtar – who are now eliminated from Europe for the campaign – in Milan.