Arnor Ingvi Traustason's breakaway goal at the death was a cruel finale for Austria, as Iceland weathered a second-half battering to set up an improbable round of 16 meeting with England.
Johann Gudmundsson smacked a shot against Robert Almer's crossbar in the second minute, and the prodigiously cool-headed Icelanders were in front before too long. Kári Árnason nodded on Aron Gunnarsson's long throw from the right for Jón Dadi Bödvarsson, who threw off his marker with one touch before sliding the ball past Almer with a second.
Ari Skúlason conceded a penalty after impeding David Alaba in the box, but Aleksandar Dragović pulled it onto the outside of Hannes Halldórsson’s right-hand post, possession percentages proving no comfort as Austria went into the interval a goal down.
However, Marcel Koller's men emerged an altogether more fearsome beast after a half-time rethink, substitute Alessandro Schöpf powering into the box and unhinging the Iceland defence before sweeping in an inevitable-seeming equaliser. It was an onslaught thereafter. Halldórsson saved from Schöpf, flipped an Alaba free-kick over, but insult was to follow injury – Elmar Bjarnason breaking deep into added time to set up fellow substitute Traustason's winner.
Man of the match: Kári Árnason (Iceland)
Centre-half Árnason took the honours in Saint-Denis for a terrific defensive showing culminating in a superb goal-line block – and capped by his assist for the opener.
How cool are Iceland?
Lars Lagerbäck and Heimir Hallgrímsson have a smaller pool of players to choose from than any other side at these finals, yet they have made a little go a long, long way. Defensive, maybe, but not negative, at their best the Icelanders exude a sense of glacial calm. Perfectly tooled to confound patient, stylish teams, they looked a deal more ragged when rushed. Will that suit their next opponents?
Austria's half-time reboot
Unlucky, perhaps, to miss a penalty, Austria reached half-time having played a game that suited Iceland, their 3-6-1 formation all bark and little bite. With Marc Janko and Schöpf introduced, they battered Iceland. After retaking the initiative, and levelling on 60 minutes, the stage was set for a EURO-saving comeback, but they fell agonisingly short.
Reporters' views from Stade de France
Johann Olafur Sigurdsson, Iceland (@UEFAcomJohannS)
Iceland have made history with this result. It was not, perhaps, the best of performances, especially in the second half, but they are through to the last 16 – something that people back home only dreamed of. What a huge result for Icelandic football. Everything is possible now – just ask Denmark and Greece.
Daniel Thacker, Austria (@UEFAcomDanielT)
This was a heartbreaking end for Austria. Koller's side threw everything at Iceland in the second period, only to be denied time and again by a stout rearguard. It was a sub-standard first half, however – in which Dragović struck the post with his penalty – that ultimately cost them their chance to progress.
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