Group F was always destined to go down to the wire but Arsenal only needed to avoid losing by three goals to avoid any chance of not advancing to the second round.
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However the Gunners made hard work of it as Napoli produced two late goals in a 2-0 win.
Napoli started their late show in the 73rd minute when Gonzalo Higuain showed superb poise to fire home on the turn from 15 metres to send the home fans into raptures, before Gunners' midfielder Mikel Arteta saw red for a second bookable offence.
At that stage of the night, Higuain's goal had taken Napoli into second in the group as Borussia Dortmund were level on 1-1 with Marseille after Robert Lewandowski's fourth-minute goal for the Bundesliga side was cancelled out by Souleymane Diawara's equaliser 10 minutes later.
But there would be a final twist in the tail as Kevin Grosskreutz fired home an 87th-minute winner for Borussia Dortmund as they finally took advantage of a mountain of pressure late in the encounter.
Grosskreutz's goal was met by howls of despair from fans in the stands at Napoli as it meant Rafael Benitez's men needed to win by three goals to advance, but the Italian side made a fist of it as they scored once again through Jose Calejon deep into injury time.
But the encounter had barely re-started before the final whistle blew, sending Napoli into the Europa League.
Napoli's Argentinian forward Gonzalo Higuain reacts at the end of the UEFA Champion's League group F football match between SSC Napoli and Arsenal FC at the San Paolo Stadium. Photo by GABRIEL BOUYS/AFP/Getty Images
The final result from the group saw Borussia Dortmund advance on top with a 12 points and a goal difference of +5, Arsenal finish in second with 12 points and a +3 goal difference and Napoli in third with 12 points and a +1 goal difference.
Earlier in the day, the final match of Group B was completed after the clash between Galatasaray and Juventus was suspended at the 31st-minute mark on Tuesday night as a blizzard struck in Istanbul.
In an afternoon slug-fest on a muddy pitch, chopped up badly by the heavy snow the night before, Wesley Sneijder proved the difference as he fired home the only goal of the day from Didier Drogba's knockdown to secure the 1-0 win.
Galatasaray's Wesley Sneijder celebrates his goal with Didier Drogba during their UEFA Champions League group B football match at Turk Telekom Arena. Photo by BULENT KILIC/AFP/Getty Images
Chelsea, meanwhile, secured top spot in Group E with a routine 1-0 victory over Steaua Bucharest at Stamford Bridge.
Despite suffering a second defeat to Basel on matchday five, Jose Mourinho's men were already assured of a place in the last 16 and had little trouble in seeing off limited opposition on Wednesday.
Demba Ba's 10th-minute strike from a Willian corner surprisingly proved the only goal as Chelsea demonstrated little desire to move in for the kill thereafter.
Gabriel Iancu spurned a golden opportunity for the visitors three minutes after Ba’s opener, but Steaua were generally kept at bay with a degree of comfort.
In failing to record victory for a 23rd Champions League game in succession, the Romanian outfit set a new record for the longest winless run in the competition.
Veteran Chelsea goalkeeper Mark Schwarzer replaced the rested Petr Cech, the Australian becoming the Champions League’s oldest debutant – and second-oldest player – at the age of 41 years and 66 days.
Chelsea's English defender John Terry (R) vis for the ball with Steaua Bucharest's Italian forward Federico Piovaccari (L) during the UEFA Champions League group E football match between Chelsea and Steaua Bucharest at Stamford Bridge. Photo by BEN STANSALL/AFP/Getty Images
Schalke also sealed their place in knockout stages, easing the pressure on coach Jens Keller with a 2-0 win over Basel that saw them finish second in Group E.
The Germans came into Wednesday's clash at the Veltins Arena having won just one of their last five, but cruised past the Swiss side - who played the majority of the game with 10 men.
Basel's hopes of qualifying at Schalke's expense were dented on the half-hour as defender Ivan Ivanov was sent off for hauling Adam Szalai down as the Hungarian closed on goal.
Julian Draxler showed his finesse to put Schalke ahead, turning home first-time from Jefferson Farfan's cross, though their second goal was highly controversial.
Basel's defence sprung an offside trap from a right-wing Schalke free-kick, but the linesman did not raise his flag, leaving Joel Matip all alone to slot home - although replays showed the Cameroonian was one of four home players beyond the last defender.
Schalke's midfielder Max Meyer and Basel´s Egypt midfielder Mohamed Elneny vie for the ball during the UEFA Champions League group E football match FC Schalke 04 vs FC Basel 1893. Photo by ATRIK STOLLARZ/AFP/Getty Images
In Grouo G, Zenit St Petersburg lost 4-1 at Austria Vienna but still reached the knockout phase due to Porto's loss at Atletico Madrid.
The Russian side required victory to progress from the group without relying on the outcome in the Spanish capital and Aleksandr Kerzhakov put them on course to do just that with the opener in the 35th minute.
However, Vienna scored three goals – two courtesy of Philipp Hosiner – within seven minutes either side of the break to leave Zenit facing an anxious wait before Roman Kienast added a fourth late on.
Austria Wien's forward Philipp Hosiner (R) and Austria Wien's forward Marko Stankovic celebrate after scoring the 1-1 during the UEFA Champions League group G football match FK Austria Wien vs FC Zenit. Photo by SAMUEL KUBANI/AFP/Getty Images
Porto, though, were unable to recover a first-half deficit, resigning them to Europa League football and sending Zenit through to the Champions League round of 16 with only six points from six games.
Porto, though, only had themselves to blame as they hit the woodwork four times and missed a penalty in their 2-0 loss at Atletico Madrid as Raul Garcia and Diego Costa found the back of the net in the first half.
Atletico Madrid's forward Adrian Lopez controls a ball during the UEFA Champions League Group G football match Club Atletico de Madrid vs FC Porto at the Vicente Calderon stadium. Photo by JAVIER SORIANO/AFP/Getty Images
And lastly, in Group H, Neymar's 13-minute hat-trick helped Barcelona seal top spot in the group in style with a 6-1 demolition of Celtic.
The Brazil star had not previously scored in Europe's premier club competition, but was in irrepressible form against the Scottish champions at the Camp Nou on Wednesday.
Barca lost their last Champions League outing at Ajax, but were in no mood to repeat that disappointment as they dismantled Celtic with an irresistible attacking display.
Gerard Pique began the rout after just seven minutes, before Pedro doubled the hosts' advantage five minutes before the interval.
Neymar's first goal came in the 44th minute, and he had completed his treble before the hour-mark with two superb finishes before substitute Cristian Tello added a sixth 18 minutes from time.
Giorgios Samaras of Celtic FC hugs Gerard Pique of FC Barcelona at the end of the Champions League Group H match between FC Barcelona and Celtic FC at Camp Nou. Photo by David Ramos/Getty Images
AC Milan finished second behind Barcelona but had to do it the hard way as they held Ajax to a 0-0 draw after going down to 10 men during the first half.
Milan captain Riccardo Montolivo was sent off for a lunge on Christian Poulsen after only 22 minutes at San Siro, but Ajax were unable to secure the victory they needed to progress from Group H.
Poulsen was denied by the post before Montolivo saw red and Serie A outfit Milan dug deep with a dogged defensive display to secure second place behind Barcelona.
Ajax were totally dominant but failed to make the most of their numerical advantage as they missed a golden opportunity to reach the last 16 for the first time in eight years and were forced to settle for a Europa League spot.
Kaka of AC Milan in action during the UEFA Champions League Group H match between AC Milan and Ajax Amsterdam at Stadio Giuseppe Meazza. Photo by Claudio Villa/Getty Images