The EFL Trophy is a competition that sees Premier League under-21 sides face teams from the English Football League, with the Reds first involved in 2019.
It took 13 matches for the Reds to win their first game in the competition, which came earlier this season in a 3-0 win at Morecambe thanks to goals from Mateusz Musialowski, Calum Scanlon and Bobby Clark.
And it was the fate of Morecambe that was tied to the Reds hopes of progressing, they had to avoid defeat in their final outing to finish above Liverpool, but Neil Critchleys Blackpool won 2-1 on Tuesday evening.
The former academy coach, therefore, helped the Reds progress to the knockouts for the very first time thanks to goal difference as both Liverpool and Morecambe finished on three points.
EFL Trophy group stage results:
It is a significant step forward for the U21s in this competition, which exposes young players to the demands of senior football and has been a launching pad for a number of academy graduates.
Musialowski has been a standout this season, scoring in all three group games, and he will be a key player in the first knockout round, which will pit the Reds against a group winner.
Liverpool can only face a side in the Northern section of the draw, which means a match up with one of Wrexham, Accrington Stanley, Wigan, Bolton, Barnsley, Derby or Doncaster.
Conor Bradley won the trophy last season while on loan at Bolton, though no Premier League academy side has yet to make it to the final.