City was the favourite for this season's competition heading to the quarter-finals in Lisbon, yet it was stunned by Lyon on Sunday (AEST), crashing out with a 3-1 defeat.

It is the third consecutive campaign in which Pep Guardiola's side has been beaten in the last eight after a humbling at the hands of Liverpool and then a dramatic loss to Tottenham Hotspur, both of which would subsequently reach the final.

De Bruyne equalised for City after Maxwel Cornet's first-half opener, but a Moussa Dembele brace – the first contentious, the second courtesy of an Ederson error – saw Lyon through.

City's talismanic midfielder said afterwards: "We need to learn. It's not good enough. That's it."

He added: "It's a different year, same stuff. I think the first half wasn't good enough, I think we know that.

"We started slow. We had not many options, but I think second half we played really well.

"We come back to 1-1, missed a couple of chances and then, obviously, the 2-1, the 3-1 ends the game. It's a shame for us to go out in that way."

Raheem Sterling had a glaring miss at 2-1 that would have brought City level again and De Bruyne acknowledged big matches turn on such moments.

"Even at 2-1, if Raz scores the goal, it's 2-2 and the game goes on," he said. "That's football, those fine margins, they make the difference. It's 3-1 and it's all over."

There was controversy surrounding Dembele's first, as Karl Toko Ekambi was offside and let the ball through his legs, while Aymeric Laporte claimed to have been fouled.

But De Bruyne did not look for excuses, saying: "I have no idea, I've not seen it back. Whatever they decide, they decide.

"I'm not going to blame that. I think we should have done better. I'd have to look back to see whatever it was."