Twitter footage posted by a FIFA social media reporter showed the moment the players discovered they were extending their stay in the tournament, with ecstatic players and staff dancing and hugging in the corridors.
Nigeria had finished third in Group A with three points having suffered a late 1-0 loss to hosts France on Monday.
That left them sweating on favourable results from Thursday's final round of group fixtures.
Chile required a three-goal victory over Thailand to bump the Nigerians out of the tournament and when they were awarded a late penalty, having already established a 2-0 lead, it appeared the South Americans were poised to progress.
In a late twist, however, Francisca Lara slammed her penalty against the crossbar.
Thailand, who shipped 13 goals in their opening match against the U.S., held firm in the closing minutes, meaning Nigeria qualified as one of the best third-placed teams on goal difference.
With Cameroon also qualifying as one of the best third-placed teams after beating New Zealand 2-1, it means two African teams have progressed to the knockout phase for the first time.
Nigeria will face Germany in Grenoble on Saturday.
(Reporting by Martyn Herman, editing by Nick Mulvenney)
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