Barcelona's Paulinho opened the scoring before Manchester City's Gabriel Jesus bagged a brace to secure a win already-qualified Brazil which relegated Chile to sixth place in the standings.
The Chileans finished level on points with Peru, who secured a two-leg playoff against New Zealand, but trailed on goal difference.
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Chile coach Juan Antonio Pizzi announced his resignation following the exit. "I take full responsibility," Pizzi told reporters. "We gave everything but it was not enough. I will not continue."
Peru meanwhile kept alive their hopes of qualifying for the World Cup for the first time since 1982 with a fighting 1-1 draw with Colombia in Lima.
Colombia took the lead through James Rodriguez in the 56th minute before veteran striker Paolo Guerrero equalised in the 74th minute. The result saw Colombia qualify alongside Uruguay, 4-2 winners over Bolivia in Montevideo.
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Uruguay, who finished the standings in second place, were jolted by a Gaston Silva own goal which gave Bolivia the lead on 24 minutes.
Martin Caceres and Edinson Cavani scored twice just before half-time to give Uruguay the lead before two goals from Luis Suarez put the hosts 4-1 up.
Bolivia reduced the deficit when Uruguay's Diego Godin scored the second own goal of the night.
In the day's other game, Paraguay's hopes of qualification evaporated in a 1-0 loss to Venezuela in Asuncion.
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