Three-times winners Iran, who had already won the group and will play South Korea in the last eight, made nine changes to their team but still beat United Arab Emirates 3-0.
Iran finished Group D with nine points from three matches with Iraq second on six. North Korea and UAE exited the tournament with one point apiece having failed to score a goal.
The quarter-final against Australia, the best FIFA ranked side in the tournament, will bring Iraq's German coach Wolfgang Sidka up against his compatriot Holger Osieck.
"I know him very well," Sidka told reporters. "Unfortunately two German coaches play each other in the quarter-finals, I would like to see him later on."
The match will be the second successive tournament the pair have clashed after Iraq beat Australia 3-1 in the group stages of the tournament four years ago.
Iraq opened the scoring in the 22nd minute when Korean goalkeeper Ri Myong-guk fell backwards after parrying a 25-metre drive from Mustafa Kareem, allowing Kerrar Jasim to convert into an unguarded net.
The goal should have sparked the Koreans, who needed to win to advance, but they continued with their safety first mentality and were restricted to shots from distance.
Not even their 200 supporters, all wearing a neat shirt and tie, could bring their team out of their shells. Led by an excitable choreographer, the Korean fans chanted, waved flags and pumped their fists in unison throughout the drab contest.
BEST CHANCE
German-based striker Jong Tae-se had the Koreans' best chance with 13 minutes left but his low shot on the turn was straight at the goalkeeper.
"I think we deserved this victory especially in the first half I was very satisfied how we played," Sidka said.
Korean coach Jo Tong-sop told reporters his side had learnt from their first Asian Cup since 1992.
"We got good experience during the tournament so we understand defending is important but attack is more important so in the future we will try and make our games more attacking," Jo, who was non-committal about his future, said.
At the Qatar Sports Club, Iran, suffering from a bout of flu which has hit several members of the squad and coaching staff, maintained their 100 percent Group D record with a 3-0 win over UAE.
Iran broke the deadlock in the 70th minute when Gholam Rezaei chased down the right wing and crossed for Mohammad Gholami to head against the bar with goalkeeper Majed Naser beaten.
He responded first to the rebound and headed that against the bar before Arash Afshin planted the second rebound into the empty net for his first international goal.
Afshin's joy was short-lived, however, as he was red-carded five minutes later for fouling the goalkeeper.
There was still time for UAE defender Khalid Sebil to be sent off and Mohammad Nori added a second when he swept a shot into the corner of the net. UAE's Walid Abbas capped a disappointing tournament for his side by scoring his second own goal of the tournament in stoppage-time.
"I'm happy to go to the second stage with a perfect record and to be the only team with nine points," Iran coach Afshin Ghotbi said.
"Having said that, all teams start fresh and it's like a new tournament."
