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Guardiola's City beat Borussia Dortmund 2-1 to reach the Champions League semifinals for the first time in six years.
Bayern striker Eric Choupo-Moting scored the only goal before the interval but it was not enough to overturn the German side's 3-2 loss in last week's first leg against PSG.
The result ended City's six-game winning streak in all competitions as they remained on 74 points, 14 clear of second-placed Manchester United at the top of the standings having played two more games.
Manchester City's Phil Foden grabbed a last-minute winner as they beat Borussia Dortmund 2-1 in their Champions League quarter-final first leg on Tuesday after Marco Reus netted a late equaliser for the Germans at The Etihad.
City now need, at most, 11 points from their remaining seven matches to secure their third Premier League title in four seasons.
Chelsea beat Atletico Madrid 2-0 to reach the quarterfinals for the first time since 2014.
Real, who were knocked out in the last 16 by Manchester City last term and Ajax Amsterdam the season before, reached the last eight for the first time since 2018.
Borussia Dortmund striker Erling Haaland struck in each half as they advanced to the quarterfinals after a 2-2 draw with Sevilla in their last-16 second leg to complete a 5-4 aggregate win.
Ferland Mendy grabbed a late winner to earn lacklustre Real Madrid a 1-0 win over 10-man Atalanta.
Borussia Dortmund's Erling Haaland continued his prolific run in the Champions League by scoring twice as his side came from behind to earn a 3-2 win at Sevilla in a last-16 first leg.