Both goals in the Group C matchday 5 clash came from penalties with Mohamed Tahir converting midway through the first half and Ivorian Cheick Moukoro soon after half-time.
Libolo had giant France-born striker Mamadou Diawara sent off just before half-time in Obeid, a city 350 kilometres west of the capital, Khartoum.
Victory gave Hilal an uncatchable four-point lead over third-place Libolo with one round to play in a group completed by Zesco United of Zambia and Smouha of Egypt.
Zesco recovered from a matchday 4 mauling by Libolo in Angola to draw 1-1 with Smouha in ancient Mediterranean city Alexandria.
The Zambian outfit went ahead six minutes from time when a shot from Kenyan Jesse Were was deflected into his net by defender Yasser Ibrahim.
Smouha equalised one minute into stoppage time when Burkinabe Banou Diawara converted a penalty.
Hilal have 10 points, leaving Zesco (seven), Libolo (six) and Smouha (five) to fight for the other quarter-finals place.
Mouloudia Alger of Algeria are also through to the last-eight stage of the secondary African club competition after a 2-0 home win over Platinum Stars of South Africa on Friday.
Captain Abderahmane Hachoud scored from a 12th-minute penalty and a superb half-volley by Hichem Nekkache in stoppage time sealed victory.
Record three-time CAF Confederation Cup winners CS Sfaxien of Tunisia or Mbabane Swallows of Swaziland, who meet Sunday in Lobamba, will be the other Group B qualifiers.
Former African champions Mouloudia have 11 points, Sfaxien seven, Swallows four and Platinum two.
A pattern of draws between the three Group D clubs challenging for qualification continued in Conakry with a 0-0 stalemate between Horoya of Guinea and SuperSport United of South Africa.
All five matches involving those clubs and title-holders TP Mazembe of the Democratic Republic of Congo have been drawn.
SuperSport had a late let-off when the referee awarded Horoya a penalty only to change his mind when the South Africans appealed for offside and a dive by Ocansey Mandela.
Horoya lead with nine points, SuperSport have seven and Mazembe six ahead of an away fixture against pointless Mounana of Gabon in Libreville Sunday.