After the semi-final finished goalless following extra time last night, Leonardo Bonucci proved the fall guy for the Italians, blazing the 13th kick of the shoot-out over the bar before Manchester City new boy Navas calmly tucked his penalty home.
Spain will now seek to complete their set of senior international titles, having also won Olympic gold in Barcelona in 1992, but hosts Brazil were spared a 120-minute semi-final and will have had 24 extra hours to recover.
"We will definitely stand up to Brazil in the Maracana and I hope the players will feel as happy as kids about playing there."
Italy were left to curse their luck after initially shackling Spain in the first half, and coach Cesare Prandelli must now galvanise minds and bodies for Sunday's meeting with Uruguay in the third-place play-off.
He nonetheless drew solace from the way his side matched Spain, having seen Italy crushed 4-0 when the sides last met in last year's one-sided Euro 2012 final in Kiev.
"But once it goes to penalties, anything can happen," he added.
"Spain are currently ahead of us because they've been following the same ideology for years, whereas we're still forging our own path."
Chastened by the memory of the Euro 2012 final, Prandelli reverted to the formula he had successfully used in the 1-1 draw between the sides earlier in that tournament.
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