The Flying Eagles were beaten 2-0 by Brazil in their last group game of the ongoing FIFA U-20 World Cup on Saturday, but still reached the round of 16 of the tournament as the best third-placed team in the Group stages with six points.
Nigeria will face either hosts Argentina or USA for a place in the quarter-finals.
Nigeria needed at least a draw against the Brazilians to seal top spot in Group D but they found themselves behind in the first half no thanks to Henrique Pedroso and Marquinhos goals.
Italy also beat Dominican Republic 3-0 in the other final group game to seal their place in the next round.
Despite losing their opening game against Italy, Brazil finished top of the six points while Italy followed in second place on goal difference.