A week on from their 2-2 draw in the French capital, City saw Sergio Aguero squander a first-half penalty after he had been felled by PSG goalkeeper Kevin Trapp, but De Bruyne's late strike settled the Etihad Stadium nerves and completed a 3-2 aggregate success.
Fifteen points off the pace in the Premier League and widely considered the tie's underdogs, City advance with hope intact that manager Manuel Pellegrini may yet bow out with a Champions League winner's medal around his neck before handing over to Pep Guardiola.
"Kevin De Bruyne is an important player for us. We deserved a goal before he scored. We dominated the game from the beginning until the end."
But it was a bitterly disappointing evening for PSG coach Laurent Blanc, who lost Thiago Motta to injury and has now seen his team eliminated in the quarter-finals four seasons in a row.
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The French champions' ambitious Qatari owners must once again content themselves with the pursuit of another domestic quadruple, while Zlatan Ibrahimovic, whose contract expires at the end of the season, may never grace the continental stage in their colours again.
"City were much more clinical and that's why they qualified. Bravo to them. They're a very good team -- not spectacular, but very effective."
- Blanc rejigs -
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With Angel di Maria operating in a free role, PSG had plenty of options in midfield and they made an assured start, City goalkeeper Joe Hart forced to make a finger-tip save from a zinging Ibrahimovic free-kick.
But as City began to probe, so they exposed fissures in PSG's new-look defence and after Aguero had twice shot wide, a loose pass from auxiliary right-sided centre-back Serge Aurier allowed Fernandinho to set Aguero clear.
It was a let-off for the visitors, but after another careless Aurier pass had allowed Jesus Navas to curl wide, they suffered a further blow when Motta went off holding the back of his left thigh.
With Blaise Matuidi suspended and Marco Verratti injured, it left PSG without their entire first-choice midfield and Blanc promptly rejigged, sending on Lucas Moura and reverting to his trusted 4-3-3.
Hart had to parry another stinging Ibrahimovic free-kick and then clubbed the ball over his crossbar after Thiago Silva's header from a Lucas corner spat up off the turf towards him.
The introduction of Javier Pastore for the hapless Aurier, on the hour, left PSG with their full attacking armada on show, but it was De Bruyne who stole the headlines, brilliantly shaping a right-foot shot into the bottom-right corner from outside the box to crush PSG's spirit.