Peter Schmeichel was shocked by Real Madrid's late comeback in the Champions League after Manchester City controlled most of the game.
City came into the game 4-3 up on aggregate and looked comfortable for the opening 89 minutes, but two late goals for Real's Rodrygo took the game to extra-time and a Karim Benzema penalty sealed the tie's fate.
Real boss Ancelotti will now manage a record fifth Champions League final as his side faces Liverpool in a repeat of 2018's final.
The loss for Man City makes it six seasons without a European trophy for manager Pep Guardiola.