Chelsea took the lead in the 14th minute when Lucy Bronze's shot hit the post before Sandy Baltimore pounced on the rebound to beat City goalkeeper Khiara Keating.
Sonia Bompastor's side doubled their lead in the 38th minute when Nathalie Bjorn headed home from Baltimore's corner and Mayra Ramirez added a third five minutes later, finishing off Lauren James's cross.
Chelsea, who have played City four times this month, beating them in the League Cup final and 2-1 in the Women's Super League, set up a semi-final showdown with Barcelona, who earlier thrashed VfL Wolfsburg 6-1 to complete a 10-2 aggregate win.
City would have been dreaming of making the last-four after a brace from Viviane Miedema in the first leg.
On Thursday at Stamford Bridge, Chelsea progressed despite the desperate efforts of striker Mary Fowler.
The young Matildas star was denied at the end of the first half when her effort was saved by goalkeeper Hannah Hampton, before Miedema fired wide with less than 20 minutes remaining.
Chelsea, who are still without injured super-striker Sam Kerr, now meet defending champions Barcelona.
Barca started fast and were 3-0 up at the break following a Salma Paralluelo double and Esmee Brugts's fine strike.
Substitute Claudia Pina bagged a fourth before Wolfsburg forward Lineth Beerensteyn pulled a goal back for the visitors.
Pina and defender Maria Leon completed the rout for Barcelona with two free kicks.
Olympique Lyonnais, who boast hard-running Australian right-back Ellie Carpenter, meet Arsenal - spearheded by Matildas Caitlin Foord, Steph Catley and Kyra Cooney-Cross - in the other semi-final.
