Trailing 1-0 from the first leg, Young Chimodzi's side restored parity courtesy of an early goal from John Banda at the Kamuzu Stadium in Blantyre.
The sides could not be separated during normal time or extra-time, with Malawi ensuring their progress courtesy of a penalty shootout victory.
Having overcome Chad on away goals to reach the second qualifying round, Malawi will now move into Group B of the main qualifying section alongside Mali, Algeria and Ethiopia.
After giving themselves a mountain to climb, courtesy of first-leg goals from Cesaire Gandze and Ferebory Dore, Saturday's hosts levelled the aggregate score shortly after half-time when Michel Ndahinduka and Meddie Kagere struck.
After they levelled the tie, Rwanda came through 4-3 on penalties to complete an impressive comeback and book themselves a place in Group A of qualifying alongside reigning champions Nigeria.
Botswana succesfully defended a two-goal lead against Guinea-Bissau with a 1-1 draw in the second leg at the Estadio 24 de Setembro.
Ivanildo threatened a comeback with a goal after 20 minutes but Jerome Ramatlhakwane calmed any Botswana nerves with a goal in the final minute of normal time to ensure progression.
However, the Seychelles' Football Federation decision to withdraw, reportedly due to health fears over the Ebola virus, ensured their opponents progressed to Group D.
