Italy downed England on penalties (3-2) after a 1-1 deadlock was unable to split following 120-minutes of play before a crowd of 67,000 people.
Italian keeper Gianluigi Donnarumma will be heralded as a national hero back home after stopping three penalties to see his nation to glory.
Donnarumma saved from Jadon Sancho and Bukayo Saka after Marcus Rashford hit a post.
Meanwhile, Federico Bernardeschi, Leonardo Bonucci and Domenico Berardi all scored for the Azzurri.
Luke Shaw got England off to a strong start with a goal after two minutes but Italy slowly gained momentum and levelled through Bonucci after 67 minutes.
A tense end to the 90 minutes forced the game to extra time, where the sides still couldn’t be separated.
Italian striker Andrea Belotti was the first to blink in the shootout, with Jordan Pickford making a good save to deny him, but England could not make the most of the advantage.
Marcus Rashford and Jadon Sancho were both subbed on specifically to take penalties, and both missed.
Rashford’s penalty was poor, sliding into the post and going behind, while Sancho’s was well saved by Donnarumma.
Pickford saved again from Jorginho to keep the shootout alive, but when Donnarumma denied 19-year-old Saka, the title was Italy’s.
It was the first final to be decided on penalties since Czechoslovakia defeated West Germany in 1976 and has seen Italy finally triumph after they lost in the finals in both 2000 and 2012.
England was hoping to claim the victory in their first major final since they won the World Cup 55 years ago.
