Andre Villas-Boas' side set up a last-16 tie against Inter Milan with an equalizer right at the death.
Maxime Gonalons gave the Ligue 1 side the lead after 17 minutes when he headed in Clement Gernier's free kick and it seemed that Samuel Umtiti's away goal from the first leg would be enough to see Lyon through. That was until Mousa Dembele's thunderbolt right at the death dramatically turned the tie on it's head.
Andre Villas-Boas made one change to the Spurs side that won the first leg 2-1, Clint Dempsey dropped to the bench with Lewis Holtby returning to the starting lineup. Lyon boss Remi Garde also made one change, opting for Gernier ahead of former Spurs midfielder Steed Malbranque.
The first real chance of the match fell to the home side after 10 minutes when Gernier's cross, at the second time of asking, found Alexandre Lacazette unmarked inside the box, but the Frenchman could only direct his header straight at Brad Friedel.
Gernier's next ball did result in a goal. The 22-year-old's free kick from the left side was fired in towards the front post where club captain Gonalons was on hand to head past Friedel and level the aggregate score.
Lyon's away goal at White Hart Lane in the first leg meant Spurs had to score at the Stade de Gerland, but Villas-Boas' men were struggling to test Remy Vercoutre.
Instead it was Lyon who threatened to score a second and perhaps could have done had Fofana taken more care with his through ball for Bafetimbi Gomis. Lisandro Lopez also wasted a chance when he failed to find the target after meeting Lacazette's cross in the area.
Spurs did come close just before the break though. Holtby had a low shot hit from just outside the area tipped on to the post by Vercoutre.
Tottenham came out on the front foot in the second half and had a glorious chance to go level when Adebayor found Bale unmarked after a swift counterattack, but the Welshman hit his first-time finish inches wide of the post.
With Spurs pressing forward, Lyon were always going to threaten on the break and they would have gone further ahead had it not been for a fine save from Friedel to deny Gernier's snap shot from inside the box just before the hour mark.
Referee Wolfgang Stark then made two big calls as he waived away penalty appeals from both sides, before Bale and Adebayor both came close to scoring for Spurs. Adebayor hit the top of the bar with a cross moments before Bale stung the hands of the Lyon keeper with a drive from range.
Dempsey, a late substitute, had two decent chances in quick succession in the final 10 minutes but failed to find the target with either effort.
Lyon was strolling into the next round when, out of nowhere, Dembele shocked the Stade de Gerland with a powerful long-range strike on the stroke of full time.