The winners and runners-up of each of the eight groups in the group stage qualified for the knockout stage. Both West Zone and East Zone had eight qualified teams.
The bracket of the knockout stage was determined as follows:
Round of 16:
Quarterfinals:
Semifinals:
Final: Winner SF1 vs. Winner SF2
Round of 16
In the round of 16, the winners of one group played the runners-up of another group from the same zone, with the group winners hosting the second leg. !colspan=5|West Zone !colspan=5|East Zone
West Zone
Lokomotiv Tashkent won 2–1 on aggregate. ---- Al-Nasr won 5–4 on aggregate. ---- Al-Ain won 3–1 on aggregate. ---- El Jaish won 6–4 on aggregate.
East Zone
Jeonbuk Hyundai Motors won 3–2 on aggregate. ---- 2–2 on aggregate. Shanghai SIPG won on away goals. ---- 3–3 on aggregate. FC Seoul won 7–6 on penalties. ---- 3–3 on aggregate. Shandong Luneng won on away goals.
Quarter-finals
In the quarter-finals, the four teams from the West Zone were drawn into two ties, and the four teams from the East Zone were drawn into the other two ties, with the order of legs also decided by the draw. The draw for the quarter-finals was held on 9 June 2016, 16:00 MYT, at the Petaling JayaHilton Hotel in Kuala Lumpur, Malaysia. There was no seeding or country protection, so teams from the same association could be drawn into the same tie. !colspan=5|West Zone !colspan=5|East Zone
West Zone
Al-Ain won 1–0 on aggregate. ---- The El Jaish v Al-Nasr first leg, originally won 3–0 by Al-Nasr, was forfeited and awarded 3–0 to El Jaish by the AFC Disciplinary Committee on 12 September 2016, as Al-Nasr fielded the player Wanderley, who was found to be registered using a fake Indonesian passport. El Jaish won 4–0 on aggregate.
East Zone
Jeonbuk Hyundai Motors won 5–0 on aggregate. ---- FC Seoul won 4–2 on aggregate.
Semi-finals
In the semi-finals, the two quarter-final winners from the West Zone play each other, and the two quarter-final winners from the East Zone play each other, with the order of legs determined by the quarter-final draw. !colspan=5|West Zone !colspan=5|East Zone
West Zone
Al-Ain won 5–3 on aggregate.
East Zone
Jeonbuk Hyundai Motors won 5–3 on aggregate.
Final
In the final, the two semi-final winners play each other, with the order of legs reversed from the previous season's final, with the team from the East Zone hosting the first leg, and the team from the West Zone hosting the second leg.