Cesc Fabregas held his nerve to score the decisive penalty as Spain overcame Italy on spot-kicks to set-up a semi-final meeting with Russia.
The composed Arsenal midfielder sent Gianluigi Buffon the wrong way from the spot to confirms Spain's progress by the narrowest of margins after a disappointing quarter-final in Vienna had ended goalless after extra-time.
Luis Aragones' side will now face Russia in Vienna on Thursday, but they will need to significantly improve after a below-par showing in a game where both they and Italy failed to show much attacking flair and endeavour.
Spain bossed possession for large portions of the game against a defensively-minded Italy and clear-cut chances were at a premium throughout a contest that seemed destined for extra-time following a cagey opening.
David Villa briefly threatened when he tested Buffon with a 30-yard free-kick which he drilled under the jumping wall on 25 minutes.
Italy's Luca Toni wasted the best opening of the first half when he failed to make enough contact with a tantalising Antonio Cassano cross on 37 minutes and the out-of-touch striker saw his feeble header deflect away off the unwitting Carlos Marchena.
At the other end, David Silva was just inches away from sneaking a low shot from the edge of the penalty area inside the far post after cutting in from the right-hand touchline.
The second half was a similarly tense affair and neither side looked capable of breaking down the opposition's tightly-packed defence.
Spain again enjoyed more possession but Iker Casillas was called upon to deny Mauro Camoranesi with his legs on the hour-mark.
The best chances of the match came in surprise circumstances on 81 minutes when the usually reliable Buffon spilled a thunderous low strike from Marcos Senna onto the foot of his post before gathering the ball at the second attempt.
Extra-time briefly brought fresh attacking impetus and both sides had chances as Silva drilled a low shot inches wide of the upright from the edge of the penalty area and Casillas was called upon to tip Antonio Di Natale's instant header from a near post cross over the top.
But the penalty shoot-out which had seemed inevitable from the opening moments ensued and Daniele De Rossi and Di Natale both saw their spot-kicks clawed away by the impressive Casillas.
Spain's Daniel Guiza also saw his effort repelled by Buffon, but Fabregas calmly stroked home his spot-kick to begin scenes of jubilation among the Spain players.