Manchester City have crashed out of the International Champions Cup after losing to Olympiacos on penalties following a 2-2 draw at the TCF Bank Stadium in Minneapolis.

The Greek side had the ball in the net in the opening stages as Alejandro Dominguez exchanged passes with Javier Saviola before curling an effort beyond Joe Hart, but the goal was ruled out for offside.

City were swift to respond, coming close to breaking the deadlock themselves in the seventh minute when Samir Nasri collected a lofted pass from Yaya Toure and dragged a shot wide of the post.

Toure came agonisingly close to getting his name on the scoresheet in the 27th minute, latching onto a pass from Stevan Jovetic before narrowly missing the target with a 30-yard rocket.

The Premier League champions were ahead eight minutes later as Jovetic surged into the penalty area and beat Roberto Jimenez in the Olympiacos goal from a tight angle.

However, City were hit by a suckerpunch moments after taking the lead, Dimitris Diamantakos catching their defence napping and rifling an effort past Hart to send the teams into the break level.

The Blues started the second half brightly and took a deserved lead from the penalty spot in the 53rd minute after David Silva was felled in the area, Aleksandar Kolarov keeping a cool head to dispatch the resultant spot kick.

However, City failed to hold onto a lead for the second time in the game, coming undone in the 66th minute when Andreas Bouchalakis threaded a through ball to Diamantakos, who slid the ball past Hart to score the goal that would eventually take the game to penalties.

The Greek side edged the shootout 5-4 after Micah Richards blazed his spot kick over the crossbar, sending both teams out of the pre-season tournament at the group phase.