The visitors booked their place in December’s Wembley final courtesy of first half strikes from Erin Cuthbert and Melanie Leupolz, before a late Beth England header completed the scoring.
City continued to press for a route back into the game, enjoying the majority of the second half play, but were unable to carve out any truly clear-cut chances to break Chelsea's stubborn resistance.
It brings our hopes of defending the FA Cup crown for a third successive year to an end, as Gareth Taylor’s side turn our attentions back to the Women’s Super League and Continental Cup.
The two sides had served up a thrilling contest in our previous meeting back in April, and the early exchanges suggested a similar story at the Academy Stadium.
It was Chelsea who started the stronger, with an unmarked Fran Kirby heading just wide from a promising position following a swift counter attack.
But City were far from second best, with two incisive balls over the visiting defence a matter of inches from finding Khadija ‘Bunny’ Shaw and Caroline Weir in promising attacking positions.
While Gareth Taylor’s side continued to press for that advantage, we were thankful at the other end to stand-in centre-half Jill Scott for a perfectly-timed sliding challenge which thwarted the onrushing Sam Kerr just after the 20-minute mark.
But the respite was short-lived, with the defending WSL champions getting their noses in front from the resultant corner with a move straight from the training ground.
Fran Kirby’s corner to the edge of the City box was met by midfielder Cuthbert and, having taken a touch to avoid the attentions of the onrushing Laura Coombs, fizzed a vicious drive on the half-volley in at Karima Taieb’s near-post.
It was frustrating for Gareth Taylor’s side, who had been growing into the contest after a tentative opening, but things went from bad to worse just five minutes later.
A Chelsea throw-in deep on the City right was cleared to the edge of the box and Leupolz, steeling in just ahead of Caroline Weir, found the bottom corner with a clinical left-footed finish through a crowd of bodies.
Following that setback, it was vital that Gareth Taylor’s side remained in the contest leading into half-time, and City stopper Taieb helped make that possible with a flurry of impressive saves.
First, Kerr beat the offside trap on 35 minutes after linking up with her strike partner Kirby, but the French international was quick off her line to blocked the Australian’s path to goal.
And Taieb once again did well to prevent a third after a moment of hesitation in the City backline presented Kirby with a chance from point-blank range.
But there was still time for one last City chance before the break, as a deep free kick triggered some penalty box pinball in the Chelsea area.
However, like the rest of the half, things just didn’t quite fall our way.
City emerged from the break with a fresh impetus, but were thankful once again to Taieb for showing some sharp reflexes to prevent Cuthbert from grabbing her second after a slight defensive mix-up.
And just two minutes later her fellow winger Lauren Hemp was presented with her first real chance to drive at the Chelsea defence, scampering away from Jess Carter around 30 yards from goal before dragging an effort wide of the far post.
A further boost was provided with the introduction of Vicky Losada from the bench, making her first appearance since sustaining an injury against Leicester in the previous round back in September.
But the game was wrapped up just before stoppage time as substitute England got on the end of Jessie Fleming's right-wing cross to plant a free header beyond the reach of Taeib to add a third.
To sum up City's afternoon, there was still time for Park to strike the post after Chelsea stopper Ann-Katrin Berger had got a fingertip to her thunderous strike from the edge of the box.
Player of the Match: Lauren Hemp
Locked in a fascinating battle with Carter down the left, Hemp's tireless industry and threat from wide meant City were always in with a chance of getting back into the contest.
How we lined up
Gareth Taylor made two changes from our 5-1 Continental Cup victory over Everton before the international break, with cup tied duo Ruby Mace and Alanna Kennedy replaced by Demi Stokes and Jill Scott respectively.
Karima Taieb started between the sticks, shielded by Scott, Greenwood and Stokes, while Beckie and Hemp provided width as wing backs.
At the sharp end, Shaw and White started as a front two.
CITY XI: Taieb, Beckie, Scott, Greenwood, Stokes, Hemp, Walsh (Losada 67'), Coombs, Weir, Shaw (Park 46'), White (C)
SUBS: Pilling, Angeldahl, Raso
CHELSEA XI: Berger, Nouwen, Bright, Ingle, Carter, Leupolz (Spence 74'), Reiten (Fleming 74') , Kirby (Charles 79'), Eriksson (C), Kerr (England 59'), Cuthbert
SUBS: Musovic, Ji, James, Andersson, Fox
Attentions turn back towards the Conti Cup, with Gareth Taylor’s side welcoming Durham to the Academy Stadium on Thursday 4 November.
City currently sit top of Group B after beating Everton 5-1 in our opening match in the competition, which our opponents are third after losing 5-3 on penalties to Manchester United following a 2-2 draw.
Kick-off against the Women’s Championship table-toppers is scheduled for 19:00 (UK), with the match available to watch live on CITY+.
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