On a night of last-32, second leg upsets, Atletico's struggling La Liga rivals Villarreal also suffered the ignominy of being eliminated by third-tier opposition when they fell 2-0 at home to Mirandes to exit 3-1 on aggregate.
The reverse at the Madrigal prompted the departure of coach Juan Carlos Garrido, with the club hovering just above the relegation places in the league following a spate of injuries to key players.
After losing last week's first leg 2-1 at Albacete, who have local hero Andres Iniesta as a major shareholder and the name of the Barcelona midfielder's vineyard across their shirt fronts, Atletico conceded after just under 20 seconds at their Calderon stadium.
Atletico had plenty of possession but hardly threatened the visitors' goal and exit the competition amid media reports an agreement with former Argentina captain Diego Simeone to replace Manzano has already been sealed.
Simeone, a fan favourite when he played for Madrid's second club, quit as coach of Argentine side Racing Club on Tuesday.
"There is a chance," he said. "Right now I don't have a team and they [Atletico] have called me."
At his post-match news conference, he apologised to the fans, who targeted the 55-year-old known as 'the professor', the players and the club's board with disgruntled chants during the game.
"There are no adjectives we can find to explain that this is a great disappointment and a disaster," Manzano said.
"I will give the players time off until December 29 and then we'll have to think over everything to see what we did right and what we need to look at."
