Atletico won 4-1 on the night to advance to a quarter-finals along with Brazilian champions Fluminense, who won 2-0 to edge their duel with Ecuador's Emelec 3-2.
An exciting last-16, second leg contest in Belo Horizonte was decided by Atletico's brilliant finishing with Jo bagging a hat-trick and Diego Tardelli also scoring.
Atletico, looking for their first Libertadores Cup triumph, will meet either fellow Brazilians Palmeiras or Mexico's Tijuana in the last eight.
It was Sao Paulo's worst defeat in South America's elite club competition, which they have won three times.
"It was a team effort because from the first minute we showed that at the Independencia we are strong," said Jo, who opened the scoring in the 18th minute with a low shot from the edge of the box.
"Once again we managed to win with these marvellous fans, it's not any team that puts four past Sao Paulo," the former Everton and Manchester City striker told reporters.
Jo's second came in the 63rd minute when he beat the offside trap to take Donizete's headed pass and steer the ball between goalkeeper Rogerio Ceni's legs.
Atletico scored again almost from the restart with Tardelli chasing a poor headed backpass from Rafael Toloi meant for Ceni and lobbing the goalkeeper.
Ronaldinho laid on Jo's hat-trick in the 69th when he pulled the ball back close to the goal-line for the striker to steer it home.
Brazil's form team were on song and the former Barcelona ace, who had hit the bar with a free-kick in the second minute, almost rounded off another fine performance with a brilliant solo goal near the end.
Ronaldinho beat four defenders on his way down the left before directing a curling right-footed shot from a narrow angle that just missed the top far corner.
Brazil striker Luis Fabiano, who missed Sao Paulo's 2-1 defeat in the first leg through suspension, pulled one back in the 76th minute.
A player from each side was sent off in added time for fighting, Atletico midfielder Rosinei and Sao Paulo defender Thiago Carleto.
Sao Paulo's director of football Adalberto Baptista defused criticism surrounding coach Ney Franco by saying he would see out his contract.
"We have to accept [our elimination], congratulate Atletico, they played a good match from the start, dominated the match," Baptista told Globo.
"There's only one measure to be taken, we have to work a lot. The [Brazilian] championship is very long and we have to start well... with Ney France, for sure, until the end of the year."
In Rio de Janeiro, Fluminense captain Fred struck after half an hour to square the tie with Emelec after losing 2-1 in the first leg in Guayaquil last week.
Defender Carlinhos secured Flu's ticket with a second goal five minutes from time when Emelec were down to nine men.
Argentine Gabriel Achilier was sent off in the 76th minut
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