Nacho Novo and Neil Alexander were the heroes as Rangers booked a place in the UEFA Cup final following an epic semi-final clash against Fiorentina.
Novo kept his cool to convert the decisive spot-kick after Alexander had saved from Fabio Liverani and Christian Vieri had missed in a tense penalty shoot-out.
The full 210 minutes of football failed to separate the two clubs as the tie finished goalless.
But Rangers will now feature in their first European final since lifting the European Cup Winners' Cup back in 1972, when they face former Light Blues boss Dick Advocaat's Zenit St Petersburg in Manchester on May 14.
Rangers were handed a massive boost ahead of kick-off with the news that David Weir had passed a late fitness test after initially being ruled out with a groin injury sustained in Sunday's Old Firm derby.
His quick recovery allowed Walter Smith to name his preferred central defensive pairing of Weir and Carlos Cuellar for the first time since the midweek defeat to Celtic on April 16, as a result of suspensions for both players since then.
Jean-Claude Darcheville started as the lone striker ahead of Daniel Cousin, with Barry Ferguson and Kevin Thomson both included after missing the first leg through suspension.
Rangers found themselves under pressure early on when Steven Whittaker's foul on Martin Jorgensen provided Fiorentina with a free-kick in a dangerous area.
Fabio Liverani presided over the set-piece 25 yards out but failed to trouble Rangers goalkeeper Neil Alexander, who gathered comfortably at the far post.
A scuffed shot from Adrian Mutu - the club's top scorer in Europe this season with six goals - was also collected by the goalkeeper, before Riccardo Montolivo blasted well over.
Thomson, back in action after serving a European ban, added to his collection of yellow cards when he picked up the first booking of the game with 28 minutes gone for dissent after fouling Mario Santana.
Good play between Ferguson and Darcheville allowed Rangers to push into the box shortly before the break, their only real attack at that stage, but the offside flag was raised before Ferguson could unleash a shot.
Marco Donadel - suspended for the first leg - hobbled out of the action four minutes before the interval and was replaced by Zdravko Kuzmanovic, as the Italians reverted to the starting 11 from Glasgow.
Mutu attempted to spark the tie into life after the restart when he collected a long ball from Santana only to screw wide under pressure from Kirk Broadfoot.
The former Chelsea striker then turned provider when he whipped a teasing cross to the feet of Giampaolo Pazzini who stabbed inches wide of the near upright.
A blocked shot from Liverani broke to Fiorentina skipper Tomas Ujfalusi who unleashed a ferocious shot that dipped just over the crossbar as the home side cranked up the pressure another notch.
With 25 minutes remaining, Rangers made their first change when Darcheville was replaced by Cousin.
Only the heroics of Alexander kept the scoreline level when Liverani tapped a free-kick to Mutu and the goalkeeper did well to block a thunderous 30-yard shot from the Romanian.
Alexander failed to hold the ball but managed to smother just in time as Pazzini bore down on goal for the rebound.
Weir and Cousin both went in the referee's book before Steven Davis saw his flick held by Sebastien Frey after the Viola goalkeeper's defence had failed to clear the danger.
Vieri was thrown into the action with 10 minutes to go and he immediately squandered a great opportunity, stumbling over the ball in front of goal and allowing Alexander to come to the rescue again.
With the clock running down, Davis made way for Nacho Novo but it was Whittaker who drew an excellent save from Frey with a curling left-footed shot as the 90 minutes ended goalless and extra-time beckoned.
Vieri saw a shot fizz across the face of goal in the first minute of extra-time, before Cousin's header was held by the goalkeeper and a shot from the Rangers striker was deflected over.
With this epic tie destined to be decided by the lottery of a penalty shoot-out, Rangers were dealt a blow when Cousin saw red after picking up his second booking of the night for clashing with Liverani after 109 minutes.
Penalties soon arrived as Rangers, with 10 men, held off the Serie A giants, riding their luck at times.
Ferguson took the first penalty and saw his kick saved to hand the advantage to the Italians.
But Alexander blocked from Liverani and Vieri blasted over, allowing Novo to keep his cool and Rangers into the final.
