Reigning champion Spain was ousted from the 2014 World Cup by suffering a 2-0 defeat to Chile at the Maracana on Wednesday.
La Roja was aiming to become the first nation to win consecutive World Cup titles since 1962, but back-to-back losses to open the tournament sees Vicente del Bosque's men bow out of the competition before the start of the knockout round.
The Chileans picked up the impressive win behind two first-half goals as Eduardo Vargas struck in the 20th minute while Charles Aranguiz put Spain to the sword with a goal two minutes before halftime.
The result sees Chile and the Netherlands secure spots in the Round of 16. The two nations, both on six points, will meet at the Arena Corinthians on Monday to determine first place in Group B.