Italy will now play either Belgium or Portugal in their quarter-final Friday in Munich
Italy scored twice in extra time through substitutes Federico Chiesa and Matteo Pessina to give the Euro 2020 title contenders a nerve-racking 2-1 victory over Austria Saturday and a spot in the quarter-finals.
The Italians, who are now unbeaten for 31 consecutive matches - a new national record - got off to a strong start and hit the upright with Ciro Immobile's powerful shot in the 32nd minute.
But Austria, looking for their first win over Italy in 62 years, grew bolder after the break and put the ball in the net through Marko Arnautovic, only for his 65th-minute header to be ruled offside after a Video Assistant Referee review.
They ran out of steam, however, early in extra time allowing Chiesa far too much time and space in the 95th to control a Leonardo Spinazzola cross in the box and rifle home from a tight angle.
Pessina also found enough space to drill in from close range in the 105th before Sasa Kalajdzic pulled one back for Austria with a glancing header.
Italy will now play either Belgium or Portugal in their quarter-final Friday in Munich.