Italy won the European Championship for the first time since 1968 as Gianluigi Donnarumma saved two England penalties en route to a 3-2 shootout win after the teams had fought out a 1-1 extra-time draw at a raucous Wembley on Sunday.
The giant keeper saved from Jadon Sancho and Bukayo Saka after Marcus Rashford hit a post, as Federico Bernardeschi, Leonardo Bonucci and Domenico Berardi all scored for the Italians.
Luke Shaw had given England a dream start with a superb goal after two minutes but Italy, who offered almost nothing in response in the first half, gradually took command and deservedly levelled through Bonucci after 67 minutes.
It was the first final to be decided on penalties since Czechoslovakia beat West Germany in 1976 and will be wildly celebrated in Italy after they lost in the final in 2000 and 2012.
For England coach Gareth Southgate, who missed from the spot when they lost in the Euro 96 semi-final to Germany, it was another shootout horror show as the two players he sent on late in extra-time with penalties in mind missed, as did 19-year-old Saka, who crumpled under the pressure of taking the final kick.
Italy, have now won five and lost six of their 10 major tournament shootouts, including one win and one loss in World Cup finals, while England's dismal record now reads seven losses from nine.
But England fans dreaming of a second title to add to the 1966 World Cup can hardly complain they were robbed this time, after they followed a strong start by surrendering the initiative despite unswerving support from most of the 67,000 crowd.
The match statistics told the story as Italy had 66% possession and 19 shots to England's six. Italy are now unbeaten in 34 matches, underlying the stunning turnaround fashioned by coach Roberto Mancini who took over after the country's humiliating failure to qualify for the 2018 World Cup.
"It was impossible even to think about this, but the guys were extraordinary," Mancini said. "I don't have words for them, this is a magnificent group. We were great, we conceded an early goal and had some problems but then we dominated."
It had all started so well for England when Harry Kane spread the ball wide to Kieran Trippier and he instantly repaid coach Southgate's faith in recalling him by sending over a curling deep cross that Shaw met on the half volley to hammer inside the post for his first international goal.
England had taken an early lead in their 2018 World Cup semi-final against Croatia before being outplayed and losing in extra time and this game began to follow a similar pattern.
England's well-drilled defence, which had conceded just one goal, via a Danish free kick, in their six previous tournament games, looked safe enough but the players in front were conceding more and more territory.
Jordan Pickford had to save from Lorenzo Insigne and Federico Chiesa as Italy began to apply pressure and it paid dividends when Bonucci pounced from close range after Pickford had turned Andrea Belotti's header onto a post.
England could have no complaints after inviting their opponents on and offering almost nothing in attack.
It was a similar story in extra time, though England did briefly force their way back into the game, albeit without creating much to reward the crowd for their waves of noise.
England briefly sensed glory in the shootout when Pickford saved from Belotti, and Kane and Harry Maguire put them 2-1 ahead. The keeper kept the hosts in it again when he saved from Jorginho, only for Donnarumma to have the final word.
"The boys couldn't have given more," Kane said. "Penalties is the worst feeling in the world when you lose. It wasn't our night but it's been a fantastic tournament and we should hold our heads high. It's going to hurt for a while, but we're on the right track and hopefully we can progress from this next year."
