The Pharaohs finished as runners-up in Group B with three points from three draws, trailing group leaders Cape Verde by four points.
The match was filled with drama, particularly during the six minutes of injury time.
Nantes FC striker Mostafa Mohamed scored in the dying moments to make it 2-1 for Egypt, but Bryan Teixeira netted the equalizer just before the final whistle, resulting in both teams sharing the spoils after an enthralling game.
Despite a strong start from Egypt, who needed to avoid a loss to keep their hopes alive in the competition, they were unable to find the back of the net.
Striker Mostafa Mohamed squandered two easy chances, with his header from close range missing the target and his follow-up shot from a rebound also off the mark.
Egypt were punished just before the halftime break when Gilson Tavares capitalized on a defensive mistake from the Egyptian defense to score a goal.
Trabzonspor winger Mahmoud 'Trezeguet' Hassan came off the bench at the start of the second half and leveled the score just five minutes after his introduction.
Trezeguet then turned from scorer to provider, setting up Mostafa Mohamed in injury time with a lob that beat the Cape Verde keeper. However, Teixeira's late goal canceled out Egypt's lead, ensuring the match ended in a draw.
In the round of 16, the Pharaohs will face the runners-up of Group F on Sunday, which includes teams such as Morocco, DR Congo, Tanzania, and Zambia.
Check the AFCON matches and standings
Check the AFCON stats
(For more sports news and updates, follow Ahram Online Sports on Twitter at @AO_Sports and on Facebook at AhramOnlineSports.)