Highly-spirited Chile stunned Spain 2-0 in their World Cup Group B second-round match here on Wednesday, sending the defending champions packing and fixing a last-16 berth for themselves.

Spain suffered the humiliation of being the first reigning champions to be out of the World Cup after just two matches.

It is not the first time for title holders to be eliminated in group stage -- among others, Italy (1950 and 2010), Brazil (1966), France (2002) -- but never before has it happened after the first two games.

Spain coach Del Bosque made big changes in today's starting line-up, leaving crucial defender Gerard Pique and playmaker Xavi Hernandez on the bench. But the result was not satisfying.

Valencia striker Eduardo Vargas gifted Chile the 1-0 lead in the 20th minute when Barcelona forward Alexis Sanchez burst through the Spanish defense, finding Charles Aranguiz free. Aranguiz made a through cross to Vargas who touched past the stranded Spain keeper Iker Casillas and hammered home.

Vargas, 25, was elected the Man of the Match.

Aranguiz lifted Chile to 2-0 on 43 minutes when Sanchez hit a free kick from distance which Casillas punched out unconvincingly. The ball dropped to Aranguiz and he poked at goal past the wrongfooted Casillas.

Bosque said after the match that his team did not play well in the first half of today's game and the second half of the Netherlands' game.

"We played too shy and did not show courage today, and Chile's aggressive style made much trouble to us," Bosque added.

He refused to comment on what would happen after the failure and left the press conference soon.

Spain injected more urgency into their game at the start of the second half, and Sergio Busquets spurned a golden opportunity to bring his side back into the game, but they could never exercise the kind of control that had been the hallmark of their success in recent years and were unable to find a goal.

Although Atletico Madrid ace forward Diego Costa was a prolific striker in domestic league and European Champions League, he could not get used to the playing style of the national team. Chelsea striker Fernando Torres, who replaced Costa in the second half, shared the same problem with Costa.

Real Madrid midfielder Xabi Alonso attempted to make amends but blasted high and wide from Costa's lay-off, before the striker scuffed a shot into the turf and side-netting as Spain's frustrations increased.

Although Spain boasted 56 percent of ball possession, they squandered too many scoring chances just at the goalmouth.

Chile goalkeeper Claudio Bravo, the captain, performed brilliantly with many top-class saves.

Chile's counter-attacks were too sharp and they showcased stronger will to win the match.

Chile coach Jorge Sampaoli said after the duel that his team played its own football, the style of which the players are very familiar with.

"We will not change our playing style in the last group match against the Netherlands," he noted.

In the first round matches of Group B, the Netherlands humiliated Spain 5-1 and Chile tamed Australia 3-1. The first match of the group's second round had ended with the Dutch men's 3-2 win over the Aussies.

Now, the Netherlands and Chile all advance to the knockout stage, both with six points from two matches. Their clash in the third round will decide the group winners. The Group B survivors will face the winners and runners-up of Group A containing hosts Brazil, Croatia, Mexico and Cameroon.

Spain and Australia turned out to be the first batch of teams out of the 42-day tournament which just entered its seventh day competition.