Olympiakos, who were resoundingly beaten 3-0 by the Spanish side in the first leg of their last-32 clash in mid-week, produced an impressive display to claim the three points thanks to goals from Portuguese midfielder Paolo Machado and Algeria striker Rafik Djebbour.
Machado curled home a superb long-range free kick after 29 minutes to put the Reds ahead and top scorer Djebbour netted his 17th goal of the season from close range to cap a fine win.
Olympiakos maintained their 16-point lead at the summit over second-placed Asteras Tripolis, who were 2-1 winners at struggling Veria.
"The most positive thing about the result was seeing the players produce the game plan that we had talked about in training; we bossed the game from start to finish and deserved to win," said Reds coach Michel, who has not given up on beating Levante ahead of the return leg on Thursday.
"We know the difficulties that we face but many things can happen in a game of football. Our target as always at this club is to win, and we will be doing everything we can to turn things in our favour."
Panathinaikos lost further ground in the race for European places as the Greens were beaten 1-0 at lowly Aris Salonika with Nuno Coelho scoring an 89th-minute goal to decide a closely-contested match.
Fabri's struggling team are now without a win in three matches and are 10th in the table with 26 points from 22 games, five points away from fifth place and the final berth for the end-of-season playoffs that decide Greece's European representatives.
PAOK Salonika slipped from second to third after being held to a goalless draw at home on Saturday by an improving AEK Athens team, who moved up to 11th place, level on points with city rivals Panathinaikos.