Western Sydney Wanderers were just a minute from a glamour Club World Cup clash against Real Madrid before they slumped to a 3-1 extra-time defeat to Cruz Azul, finishing their quarter-final with nine men.

The Asian champions from Australia defied the torrential rain as well a troubled build-up over payments to take the lead after 65 minutes when Italian midfielder Iacopo La Rocca broke free on goal to score from 25 yards.

Ten minutes later Matthew Spiranovic became the first Sydney player to be red-carded for handball.

Sydney goalkeeper Ante Covic kept out the Mexicans until the last minute of normal time when Cruz Azul were awarded a penalty which captain Gerardo Torrado converted to send the tie into extra-time.

Things went from bad to worse for Wanderers in the extra 30 minutes when captain Nikolai Topor-Stanley was shown his second yellow card, giving Cruz Azul a two-man advantage.

Cruz Azul went ahead in the 108th minute. Christian Gimenez's shot was saved by Covic but Hugo Pavone found the net after the ball broke loose.

The third goal came two minutes from the end when Mateo Poljak handled the ball inside his own area and Torrado buried another penalty past Covic.

Defeat sends Sydney into the fifth-placed play-off against Setif of Algeria, while Cruz Azul face Real Madrid in Tuesday's semi-finals.

Earlier Saturday, Auckland City defeated African champions Setif 1-0 to reach the semi-finals where they will face South American heavyweights San Lorenzo.

Oceania champions Auckland grabbed the only goal after 52 minutes when central defender John Irving found the corner of the net, sending the ball past the fingertips of Sofiane Khedairia in the Setif goal.

Kiwi striker Angel Berlanga earlier saw a clever chip come back off the crossbar.