Arsenal and Liverpool were in action on Thursday night in the semi-final of the Carabao League.
The match which was hosted at Emirate Stadium saw Liverpool defeat the Gunners with a 2-0 score.
Reacting to their disqualification in a post-match statement, Arsenal manager Mikel Arteta stressed that his side lacked quality vs the Reds.
Arsenal had held Liverpool to draw in the first leg of their semi-final clash at Anfield.
“It is disappointing because obviously, when you have the final one game away you have that excitement.
“We did everything we could to put out a competitive team.
“They [Liverpool] have the quality to finish the game off.
“You need to have a squad of 22, 23 top outfield players and to do that, it takes time,” Arteta said at a news conference after the game.
With Arsenal out of the tournament, Liverpool will now face Chelsea in the final of the tournament.
The Blues had qualified after defeating Tottenham Hotspur in the first and second leg of the tournament.