The Blues led by 24 points at three-quarter-time after an eight-goal third term but Collingwood stormed home yet again to snatch a thrilling one-point win.
Collingwood star Jamie Elliott kicked a classic matchwinner for the second time this season as the Magpies prevailed 11.9 (75) to 10.14 (74).
Elliott had the 88,287 fans - the biggest AFL crowd since the 2019 grand final - stunned as he slotted a running goal at the 26-minute mark, following on from a miracle major by teammate Beau McCreery a few minutes earlier.
Carlton had opportunities to grab back the lead but were denied by Collingwood's steely defence, leaving Blues players to slump to the ground in agony when the siren sounded.
The Magpies will enter the finals after winning 12 of their last 13 games having kept their extraordinary record in close games alive.
After finishing 17th last season, Collingwood will have a double chance in the finals in Craig McRae's first year as coach.
The Blues they are left with serious heartbreak after being in the top-eight all season until the final day.
Needing to defeat the Magpies after the Western Bulldogs replaced them in the last finals position through a 23-point win against Hawthorn earlier on Sunday, Carlton kicked only two goals outside of their third-quarter burst.
They started in nervous fashion and missed easy shots as Collingwood's pressure overwhelmed them.
Carlton rebuilt, however, and their 8.3 was the first time since the famous 1970 grand final they had kicked eight goals in a third quarter against Collingwood at the MCG, but it was ultimately not enough.
Blues captain Patrick Cripps willed his team into the contest and was named best-on-ground, despite Carlton losing.
His stat line of 35 touches and 12 clearances was impressive, but his courage was inspiring after waving away trainers following a big friendly-fire hit from Jack Silvangi.
The Blues were forced to win the sudden-death showdown without star midfielder Sam Walsh, who was a late withdrawal due to back soreness.
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