Two goals from Alejandro Pozuelo fired Toronto FC to a 2-1 upset over top seed New York City in their MLS Cup Eastern Conference semi-final clash on Wednesday.

New York were dumped out of the competition after conceding a dramatic late penalty when defender Ronald Matarrita clumsily brought down Richie Laryea at Citi Field.

Spanish striker Pozuelo stepped up and nervelessly slotted the 90th-minute spotkick to leave New York's home fans in stunned silence.

The match had seemed destined for extra-time after an entertaining second half which saw New York look firmly in control.

Toronto took the lead on 48 minutes after a dreadful blunder in the New York defence.

A speculative long ball forward ended with City's Luxembourg centre-half Maxime Chanot making a hash of his backward header to goalkeeper Sean Johnson.

Johnson was fatally slow to react and Pozuelo pounced on the loose ball for the simplest of finishes.

City responded well to the setback, however, and dominated possession with the lively Maxi Moralez and Alexandru Mitrita looking threatening in attack.

A Valentin Castellanos shot flew just wide of the post before a shot from Moralez was well saved by Toronto FC goalkeeper Quentin Westberg.

The equaliser City had been threatening finally arrived in the 69th minute. Moralez cleverly engineered some space on the left flank and whipped over a cross for Libyan international Ismael Tajouri-Shradi, who buried his low finish at the far post.

City continued to pressure but were unable to find the goal to take the lead, before Matarrita's moment of madness tipped it in Toronto's favour.

Toronto will now face either reigning MLS Cup champions Atlanta United or Philadelphia Union for a place in the November 10 final.