Beijing Guoan also reached the last-eight phase earlier in the day, although in a much more sedate fashion, as they edged out FC Tokyo 1-0 courtesy of a 59th-minute strike from A Lan.
Ulsan Hyundai have never been beaten by Australian sides in the competition and Sunday's performance helped the South Korean giants extend that record besides taking their winning streak to six matches, scoring more than one goal on each occasion.
Ulsan won the tournament in 2012 but had not gone past the last-16 phase since, but Sunday's show of strength helped them break a seven-year drought in style, with coach Kim Do-hoon declaring "we can make history in Qatar".
"I'd like to thank our players for their great performance tonight. We had a lot of chances but the players were patient in the first half," said Kim.
"We should have scored more goals but if we keep showing our quality like we did tonight, we can win the competition and make history in Qatar."
Ulsan could have won by a considerably bigger margin but for the heroics of Melbourne's Kiwi goalkeeper Max Crocombe who produced at least half a dozen saves, including a brilliant one from Kim In-sung in a one-on-one situation from 10 yards in the first half.
Melbourne, the only side from Australia to make the last 16 this year -- Sydney FC and Perth Glory were ousted at the group stage -- fell behind in the 65th minute when Ulsan's Norwegian international Johnsen steered the ball into the net after it had rebounded off the back of a defender following a shot by Kim In-sung.
Fellow sub Won Du-jae doubled their lead in the 77th minute, rising high for an excellent header to get on the end of a fine free-kick by Yoon bit-Garam.
Melbourne's exit was confirmed when Johnsen scored his fourth goal in two matches, poking the ball in from point-blank range following a corner with four minutes remaining.
"We are disappointed to be leaving the competition," said Melbourne Victory coach Steve Kean, who previously managed Blackburn in the English Premier League.
"I think the result as it reads is a flat result, and in the press it will look like we've been beaten and beaten well, but I don't believe that."