Fabio Grosso hit the winning shot Sunday to seal the 5-3 shootout victory in Berlin, Germany.
The teams had been deadlocked in a 1-1 tie at the end of the first half, and did not score in the second half or in two periods of overtime. It was the first penalty shootout in a final since the 1994 World Cup when Brazil beat Italy (3-2).
Zinedine Zidane gave France the lead in the seventh minute of the game, converting a penalty kick. Italy came back 12 minutes later when Marco Materazzi found the net. The two men would later exchange words in an off-the-ball incident during the second overtime period.
Zidane, who was playing his farewell game, was thrown out of the game after he headbutted Materazzi in the chest 10 minutes from the penalty shootout. Despite playing with a one man advantage, Italy could not find a way to score.
Italy's captain, Fabio Cannavaro, was named man of the match. In the shootout, Andrea Pirlo, Materazzi, Daniele De Rossi and Alessandro Del Piero scored for Italy before Grosso's winning blast. Sylvain Wiltord, Eric Abidal and Willy Sagnol scored for France.