Portugal beat neighbours Spain in a penalty shootout to settle a frantic final in Munich and win their second Nations League trophy.

Cristiano Ronaldo pulled Portugal level at 2-2 in the 61st minute, but there was nothing else to separate the two sides when the referee signalled the end of normal time.

Subbed off before extra time, Portugal captain Ronaldo dropped to the turf and sobbed tears of joy on the sidelines after Ruben Neves slotted home the winning penalty following Diogo Costa's save from Alvaro Morata's spot-kick.

Winners of the 2023 edition, Spain had opened the scoring in the 21st minute when Martin Zubimendi poked home after Portugal failed to clear their lines.

Their lead was short-lived as Nuno Mendes slammed a low, angled strike past Unai Simon and into the far corner of the net five minutes later.

Mikel Oyarzabal, who netted a late winner in last summer's European Championship final against England, restored La Roja's advantage before the break.

But Ronaldo came to Portugal's rescue as he shrugged off Marc Cucurella to reach Mendes' deflected cross and hook a volley in from close range.

Goncalo Ramos, Vitinha, Bruno Fernandes and Nuno Mendes all calmly fired their penalties home before Morata's weak effort was stopped by Costa.

And as Neves converted the final spot-kick, Portugal became the first team to win two Nations League titles - denying Spain, who were vying for the same honour.

The final was hyped as the first meeting between five-time Ballon d'Or winner Ronaldo and highly rated teenager Lamine Yamal - the favourite to win this year's award for the world's best footballer.

But, when the whistle blew to end a quiet first half for both players, it looked like other names would be stealing the headlines in Munich.

Oyarzabal's clever flick split Portugal's midfield wide open and kick-started Spain's attack for their opening goal, and the Real Sociedad midfielder coolly rounded Dias before slotting home their second.

But Ronaldo, as he has done so often, showed up when it mattered for Portugal - pouncing ruthlessly on a loose cross for his 138th international goal.

The 40-year-old was unable to have the final say, however, after he was replaced by Goncalo Ramos late in normal time.

Yamal, meanwhile, was subbed off in extra time without having made a meaningful impact after being largely marked out of the game by Portugal full-back Mendes.

After Spain came agonisingly close to an extra-time winner with efforts from Pedro Porro and Cucurella, Ronaldo could barely watch the shootout - hiding behind coaching staff as his team-mates stepped up to the penalty spot.

Ronaldo, after an initial outpouring of emotion, wiped his tears away and celebrated joyfully before lifting the trophy as confetti fell around Allianz Arena.