The Reds join Arsenal, Manchester United and Chelsea -- the three teams ahead of them in the EPL standings -- in Friday's draw for the quarterfinals. Barcelona of Spain, Fenerbahce of Turkey, Roma of Italy and Schalke 04 of Germany round out the final eight.
Liverpool won the Champions League under Manager Rafael Benitez in 2005 and was runner-up to AC Milan last year, but it has struggled in the EPL.
"For us," said Benitez, "the Champions League is a bit easier because we can be concentrated in two games. In the Premier League the top three English clubs are tough and it is hard every game. The difference is the Premier League is for nine months."
Inter is on course toward its third straight Serie A title, but its loss to Liverpool prompted Coach Roberto Mancini to announce after the game that he will leave at the end of the season.
March 11 in Milan
Inter Milan 0 Liverpool 1. Goal: Fernando Torres 63
Inter Milan -- Julio Cesar, Maicon, Rivas, Chivu, Burdisso, Vieira (Pele, 77), Cambiasso, Stankovic (Jimenez, 84), Zanetti, Ibrahimovic (Suazo, 80), Cruz.
Liverpool -- Reina, Carragher, Skrtel, Hyypia, Fabio Aurelio, Kuyt (Riise, 81), Leiva, Gerrard, Mascherano (Pennant, 87), Babel (Benayoun 61), Fernando Torres.
Red card: Inter Milan -- Burdisso 50
Referee: Tom Henning Ovrebo (Norway).
(Liverpool wins 3-0 on aggregate.)