The hoodoo started at the 1962 World Cup in Chile. Since then there had been four Italian wins and three draws.
But after their quarter-final at the Stade de Bordeaux ended 1-1, Germany claimed the shoot-out 6-5. The left back, Jonas Hector, clinched the tie firing the ball under the sprawling body of Italy keeper Gigi Buffon.
"From a fighter's point of view, it was amazing what the side did," said Loew as Germany reached the semis at a Euro finals for the third time in a row.
Mesut Ozil opened the scoring in the 65th minute by sweeping home Mario Gomez’s cut-back.
Leonardo Bonucci levelled 12 minutes from time from the penalty spot after Jerome Boateng’s handball.
In a dramatic shoot-out, three players from each side missed their spot kicks including Germany skipper Bastien Schweinsteiger who could have won it with Germany’s fifth attempt. Instead his effort sailed over the bar.
When Germany goalkeeper Manuel Neuer saved a shot from Matteo Darmian, Hector stroked in the18th penalty.
"The experienced players missed and the younger guys came through, so that's quite positive," Loew said. "If you want to criticise anything, sometimes we lost the ball too easily. "
Italy coach Antonio Conte said: "I'm very proud of what the team achieved here in France.”
Conte, 46, will step down after two years at the helm. His side arrived unheralded at the tournament but a group stage win over Belgium heightened expectations and they were instantly deemed contenders once they had disposed of reigning champions Spain in the last 16.
“The only regret is the penalty kicks,” added Conte who will take over at Chelsea in the English Premier League. “For commitment to the shirt, I can't fault my players."
Germany will face either France or Iceland in the Marseille semi-final next Wednesday as they chase a fourth European crown.
However they will be without centre-back Mats Hummels, who is suspended after picking up his second yellow card of the tournament. There are also fitness doubts over the midfielder Sami Khedira and striker Mario Gomez.
"We have to recover and look after some players because a game against Italy affects the body."