City bowed out of the Emirates FA Cup despite controlling possession against Chippenham, as they were unable to find a way past a spirited Bluebirds side.
The Imps controlled possession throughout the game and dominated the second half a they tried to level Joe Hanks' strike just before the break.
City had the first effort on goal after 12 minutes through Charles Vernam. He got a shot away after Ted Bishop headed Max Sanders' cross into his path, but home goalkeeper Will Henry got down well to save.
The Bluebirds pushed forward after 13 minutes with Alex Bray lifting a cross into the area - it clipped the top of the bar although Jordan Wright had his angles covered. Wright saved a Caine Bradbury effort at his near post two minutes later.
City then had a run of chances, with Lasse Sorensen seeing a shot from outside the area blocked and Freddie Draper having an effort blocked behind for a corner.
Draper was played through again, but Harrison Minturn was in his way and blocked his shot.
The home side took the lead just before the break after the home side caused problems following a Eddie Jones throw-in. Hanks backheeled the ball home in stunning style.
Imps coach Mark Kennedy made one change at the break, bringing Tashan Oakley-Boothe on for Sean Roughan.
City started the second period brightly, with only a stunning save from the impressive home keeper Henry denying Bishop after a powerful header.
Henry made another important save after 56 minutes when Bishop shot from close range after Regan Poole had headed on Charles Vernam's free-kick.
City continued to threaten the hosts, with hances from Matty Virtue and Max Sanders in the 75th minute, but the hosts were able to clear both times.
Sanders fired the ball home after 77 minutes, but referee Carl Brook ruled the goal out as a home defender had stopped to head the ball. After reviewing the match footage back, City remained convinced the goal should have stood.
Imps: Jordan Wright, Regan Poole ©, Max Sanders, Charles Vernam, Ted Bishop (Matty Virtue 65'), Paudie O’Connor, Jamie Robson, Lasse Sorensen (Adam Jackson 85’), TJ Eyoma, Sean Roughan (Tashan Oakley-Boothe 46’), Freddie Draper. Subs (not used): Isaac Allan, Jacob Davenport, Elicha Ahui.
Chippenham: Will Henry, Eddie Jones, Spencer Hamilton ©, Harrison Minturn, Will Richards, Alex Bray (Aaron Simpson 80’), Harry Parsons (Harvey Greenslade 60’), Joe Hanks (Callum Gunner 66’), Tom Mehew, Caine Bradbury (Joe Parker 81’), Luke Russe. Subs (not used): Alefe D’Abadia, Jordan Young, Craig Fazande, Leighton Tuodolo, Sam Case.
Goals: Joe Hanks (44’).
Attendance: 2,175 (402 away).
Referee: Carl Brook.