Despite their formidable display in the group stages, winning all three matches, netting eight goals and conceding just once, Senegal fell prey to the AFCON curse that has hit successive title defenders since Egypt in 2010.
Senegal had taken the lead just four minutes into the encounter with a goal from Habib Diallo.
However, an 86th-minute spot-kick in favour of Ivory Coast was beautifully converted past Senegal’s Edouard Mendy by Franck Kessie to earn a 1-1 draw and send the round-of-16 tie to extra time.
Hosts Ivory Coast put a thrilling performance to take the game to penalty shootout on Monday as they stunned holders Senegal 5-4 on penalties to book a surprise Africa Cup of Nations quarter-final against Mali or Burkina Faso.
Senegal hoped to end the curse that had seen no defending champions reach the last eight since but met their Waterloo with a shocking triump from Ivory Coast.
Ivory Coast had a tough time qualifying to the round of 16 after a 4-0 humiliation in the hands of Equatorial Guinea in thier thier outing.
After their defeat to Equatorial Guinea in their final group game, Ivory Coast had to wait three days to confirm their qualification to the round 16 during which the Ivorian FA fired coach Jean-Louis Gasset and put his assistant Emerse Fae in charge for the moment.
Senegal had comfortably defeated the Gambia, Cameroon and Guinea to top Group D, and were the favourites for the campaign but they became the seventh consecutive holders to fall victim to the AFCON curse on Monday night.