The Bavarians set up a clash against Roberto Di Matteo's men in Munich after a 3-3 aggregate draw, winning their enthralling tie on penalties against Real Madrid
A frantic start resulted in Real Madrid taking an early lead when David Alaba was judged to have handled the ball inside the area and a penalty was awarded.
Cristiano Ronaldo stepped up and, unlike his La Liga top scorer rival, Lionel Messi, cooly slotted home to put his side ahead. Ronaldo added a second goal minutes later, latching onto a through ball from Mesut Ozil.
The controversy didn't stop there though, a cross from Toni Kroos saw Pepe haul down Mario Gomez and former Real Madrid Arjen Robben beat Iker Casillas to level the tie on aggregate inside the half hour.
Both sides had chances before the break, Karim Benzema smashed a shot just wide and Mario Gomez continued to cause problems for the hosts, forcing a good save from Casillas to keep the scores level.
The second half settled into a more tactical battle as both teams attempted to find the crucial goal that would see the tie tip in their favour. Bayern Munich looked the more comfortable in possession but neither side could find the breakthrough.
Mario Gomez had a golden opportunity in the dying moment but his hesitation when presented with the chance by Arjen Robben gave the Madrid defence chance to block his tame effort. A goalless second half saw extra time and though there were half chances throughout, the tie was destined to be settled from 12 yards.
David Alaba converted the first attempt for the Germans and Cristiano Ronaldo, having already scored a penalty in the game, saw his kick saved by Manuel Neuer, that gave Bayern a huge advantage.
In a carbon copy, Kaka saw his penalty saved by Neuer but Casillas struck back, saving a tame effort from Kroos. Xavi Alonso got Real on the board at the third attempt and Philip Lahm's effort was stopped to keep Madrid in with a chance but Sergio Rames ballooned his penalty way over the bar.
Bayern's progression was confirmed when Bastian Schweinsteiger kept his head to book the Bavarians a final berth. The Germans are now 2/5 favourites and while Chelsea are at 7/4 with Sportingbet.
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Jim Knight is Betting Editor at Goal.com and has been tipping football games since he was old enough to place a bet. He is a Leicester City fan, writer and member of the We Are Going Up Podcast