Ten-man Italy secured a place in the quarter-finals as a dramatic last-gasp penalty from Francesco Totti gave the Azzurri a 1-0 victory over Australia in Kaiserslautern.

Totti struck with the last kick of the game after Fabio Grosso got past a couple of defenders and fell over Lucas Neill's challenge, with the Roma playmaker giving Mark Schwarzer no chance with the spot-kick.

The Socceroos had started well, although Alberto Gilardino should have done better with a seventh-minute opening.

Scott Chipperfield's challenge denied Gilardino soon after and with 22 minutes on the clock Schwarzer made a superb save with his left foot to deny Luca Toni.

Toni threatened a couple more times before the interval, but just as Italy seemed to be getting the upper hand, they were reduced to ten men after a debatable red card for Marco Materazzi.

The Internazionale centre-half was dismissed six minutes into the second period for a foul on Marco Bresciano, although Materazzi didn't appear to be the last man, with Gianluca Zambrotta covering.

Just before the hour mark Chipperfield turned well in the box and blasted in a near-post effort that was fisted away by Gianluigi Buffon.

Five minutes later Gennaro Gattuso failed to find the unmarked Alessandro Del Piero in the Socceroos area and soon after Schwarzer had to tip over Andrea Pirlo's free-kick.

Fifteen minutes from time Totti came on for Del Piero but he made little impact until his spot-kick heroics.

Tim Cahill headed too high following a corner with nine minutes to play and Bresciano curled a left-footer narrowly over, before Buffon made a superb claim to prevent Mark Viduka from reaching John Aloisi's cutback.

With three minutes to go Vincenzo Iaquinta wasted a gilt-edged chance to seal a win for Italy, hitting his shot from eight yards straight at Schwarzer.

But, just as extra-time seemed inevitable, referee Cantalejo intervened and Totti became the hero for Marcello Lippi's side.