Lyon needed to win by two clear goals to go through at Sevilla's expense from Group H.
Lyon -- who lost 1-0 in Seville in September and trailed the Spaniards by three points -- needed to win by two clear goals to go through at Sevilla's expense from Group H.
But they could not find a way through, with Corentin Tolisso and Mathieu Valbuena both hitting the woodwork in the first half at Parc OL.
A big enough defeat would have seen Sevilla drop down into the Europa League, a competition they have won in each of the last three seasons, but instead it is Lyon who must settle for that consolation.
Sevilla go through in second place behind Juventus, who beat Dinamo Zagreb 2-0 in Turin, and make it four Spanish clubs in the knockout stage with Real Madrid, Barcelona and Atletico Madrid already having qualified.
Lyon were hoping to join Paris Saint-Germain and Monaco and make it three French representatives in the last 16 for the first time, and had been boosted by the presence of goalkeeper Anthony Lopes in their starting line-up.
The Portuguese international was taken to hospital after firecrackers were thrown onto the pitch during Lyon's Ligue 1 game at Metz at the weekend, which was subsequently abandoned.
Lopes reportedly didn't sleep for two nights after the Metz game and suffered headaches as well as a feeling of pressure inside his ears, but he was passed fit to play.
He was beaten by Vitolo in the 19th minute but there was relief for the hosts as the Spain winger's effort came back off the far post.
Lopes could also have conceded a penalty when he brought down Vitolo inside the box but Swedish referee Jonas Eriksson waved away Sevilla's appeals.
Otherwise Lyon dominated the first half on a misty night, setting the tone when a first-time effort by Valbuena had to be turned over by an alert Sergio Rico inside three minutes.
The French club had a huge appeal for a penalty of their own midway through the first period as Valbuena went down under a Mariano challenge that began right on the edge of the box but again the referee gave nothing.
Tolisso headed against the bar from a Rafael cross and Valbuena struck the crossbar with a fine first-time shot after a good run by Tolisso as Sevilla withstood the pressure.
Lyon had more than 20 attempts on goal and the majority of the possession but they lacked the subtlety to break down the opposition defence and clear chances were at a premium in the second half.
Mouctar Diakhaby headed wide from a Nabil Fekir corner and Sevilla held on to ensure a first appearance in the last 16 since 2009/10.