Spain’s twin misses bailed out Manuel Locatelli,who had his strike saved by Simon with the first kick of the shootout and Italy’s substitutes and coaching staff poured on to the pitch to celebrate in front of their jubilant supporters behind the goal.
Italy,who will play either England or Denmark in Sunday’s final at Wembley in their first showpiece since being thrashed 4-0 by Spain at Euro 2012,are looking to win the tournament for the first time since 1968.
Roberto Mancini’s side took the lead on the hour through a sensational curler from Federico Chiesa to complete a sweeping counter-attack which began with keeper Donnarumma catching a Spain cross and rolling the ball out.
Morata levelled for Spain with 10 minutes left,calmly slotting into the bottom corner after bursting forward and exchanging a one-two with Olmo.
Spain looked more likely to find a winner in the remaining minutes and in extra time but could not manage a second shootout victory after prevailing against Switzerland in the quarter-finals.