A late goal in extra time from Youssef El-Arabi cancelled out a Pierre-Emerick Aubameyang strike to eventually send Olympiakos through on away goals after a frantic finish at the Emirates.
Arsenal perhaps shaded a pretty forgettable first half at the Emirates as Mikel Arteta’s team failed to impose themselves upon their Greek opposition.
Alexandre Lacazette thought he had given the Gunners the lead but his tap-in from Buyako Saka’s cross was correctly adjudged offside by the on-field linesman, the decision reaffirmed by VAR.
At the other end, Youssef El-Arabi proved a constant nuisance, the Moroccan international already having netted away goals against Tottenham and Bayern this season.
The best chance of the half may well have fallen to Mady Camara, who after being rolled through on an Olympiakos fast-break, only managed to drag his shot into the side netting.
The Greek visitors would have gained more hope as the fixture continued, got their reward for their patience on 53 minutes when Pape Abou Cisse headed in a corner to send the travelling support into raptures.
Olympiakos almost extended their lead minutes later but Kostas Tsimikas’ curling effort was acrobatically tipped over by Bernd Leno.
Arsenal pushed for the equaliser as Nicolas Pepe and Lucas Torreira both forced Jose Sa into smart saves.
As much as they tried however, the Gunners didn’t ever look like finding the equaliser which would have sent them through in normal time.
Instead, the two sides would have to be separated in extra time.
The flow of the game continued into the additional period as home fans flocked for the exit having seen enough of their team’s performance.
Olympiakos struck the bar in the second period of extra time as Masouras’ strike was so close to sealing it for the Greeks.
But Arsenal thought they had scored the winner when the goal finally arrived on the 113 minute mark. A looping cross was kept alive by substitute Gabriel Martinelli, whose flicked header was acrobatically finished by Pierre-Emerick Aubameyang.
There would prove to be a final twist as Youssef El-Arabi’s goal on the cusp of time sent the Greeks through on away goals.
It was not before Aubameyang himself had another golden chance at the death to snatch victory, but somehow his unmarked effort – just six-yards-out – failed to hit the target.
El-Arabi’s goal ends Arsenal’s Europa League campaign in what can only be described as a miserable performance from Arteta’s men.
2-1 was the way it finished as Olympiakos progressed on away goals and go into the draw for the last 16 of the Europa League.
Team Lineups
Arsenal XI: Leno, Bellerin (Willock, 84), Luiz, Mustafi (Sokratis, 103), Saka, Xhaka, Ceballos (Torreira, 72), Ozil, Pepe, Lacazette (Martinelli, 105), Aubameyang
Arsenal unused substitute: Martinez, Maitland-Niles, Guendouzi
Olympiakos XI: Sa, Tsimakas, Cisse, Ba, Elabdellaoui, Guilherme, Camara, Bouchalakis, Valbuena (Gaspar, 86), El Arabi, Randjelovic (Masouras, 77)
Olympiakos unused substitutes: Karargyris, Lovera, Papadopoulos, Torosidis, Bullari