In incredible scenes, Korea came into their Group H finale sitting bottom of the pile behind Portugal, Ghana and Uruguay.
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But they defied the odds to finish second behind Portugal to seal their place in the knockout stages.
Without a goal in nine months, Wolves forward Hwang Hee-chan came off the bench to fire home in the 91st minute.
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Korea skipper Heung-min Son has had a poor tournament, but he delivered the crucial assist after being selfish for the majority of the match.
And Hwang made no mistake when slipped in as he swept the ball home in the far corner to spark wild scenes from the players and fans.
Players waited nervously on the pitch following the victory as they were ahead of Uruguay on goal difference.
They were even watching the match on their phones to keep up to date with all the action.
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Uruguay were leading 2-1 and knew just one more goal would send them through to the last-16 at the expense of Korea.
But the South American nation failed to get the crucial goal, despite Edinson Cavani spurning a key chance.
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And that sparked wild celebrations on the pitch at the Education City Stadium as Son burst into tears as his teammates reacted in jubilant fashion.
Korea will now face the winners from Group G, which consists of Brazil, Switzerland, Serbia and Cameroon.
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Things got off to the worst possible start for Korea when Ricardo Horta put Portugal ahead in the fifth minute.
The right winger smashed the ball home from close range after being picked out by Diogo Dalot.
But Portugal never looked threatening again, with Korea grabbing a deserved equaliser just before the half hour half mark through Kim Young-gwon.
The defender reacted quickest inside the box following a corner as the ball somehow fell to his feet after it cannoned off a Portuguese player's head.
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No team looked likely to score in the second half, until led a counter-attack, where he slipped in Hwang in the latter stages, with the forward making no mistake from inside the box.
Speaking on talkSPORT commentary, talkSPORT's Dean Ashton said: "It's ridiculous, absolutely ridiculous!
"I've been so critical of Son for being selfish, but he's delivered such a cool pass, and it's Hwang Hee-chan with a great finish."