Poland went ahead inside two minutes on Thursday night after Robert Lewandowski scored his first goal of the tournament, before Sanches levelled it up just after the half-hour mark.
But with no other goals in 120 minutes, the game went to penalties and it was Portugal who netted all five while Jakub Blaszczykowski missed for Poland to end their campaign in France.
We take a look at five talking points from a long night in Marseille...
Nani is enjoying a French renaissance
Former Manchester United winger Nani has come into his own for Portugal at Euro 2016, and is proving to be the driving force behind their continued presence in the tournament.
The winger has so far been involved with 50 per cent of the goals for Fernando Santos' men at the Euros, contributing two goals and one assist, with the latter coming during Thursday's victory as he set up Sanches in the first half.
Ronaldo may be chasing a scoring record, but Nani could also break one of his own as he sits just one assist behind Luis Figo's record of five at a European Championship for Portugal. With potentially two more games on the cards for the winger, he could make history as he continues to enjoy his own French renaissance.
Ronaldo keeps getting frustrated
Ronaldo has now only scored in one of Portugal's five games at Euro 2016, but it wasn't for lack of trying in Marseille. He might have earned a penalty after being bundled over by Michal Pazdan in the first half and wasted a fine chance from Joao Moutinho's lofted pass in the second half. His failure to connect with Sanches' cross in extra-time summed up his night.
He only had two shots in 120 minutes with only one of those - a tame 30-yard first-half drive - on target, while the fact he had three shots blocked demonstrates the close attention he was given by the Poland defence.
The TV cameras consistently sought out his extravagant gesturing as each opportunity passed him by, but he stepped up to smash home Portugal's first penalty in the shoot-out - meaning he could yet equal Michel Platini's European Championships goals record in Wednesday's semi-final.
Super Sanches has a night to remember
Sanches was handed his first start for Portugal at the Stade Veldrome, and the highly-rated youngster certainly made it a night to remember, showing why Bayern Munich have shelled out a cool 35m euros for his services.
Not only did he score his first goal for his country in some style - firing into the net from the edge of the box - he also become the youngest ever player to score in a knockout game of a European Championship at 18 years and 316 days old.
He continued to show off his skill and lack of nerves on the big stage throughout the match, and even stepped up to take the second of Portugal's penalties to truly make his case for another starting place in the semi-finals.
Carvalho falls foul of suspension rules
William Carvalho will miss Portugal's Euro 2016 semi-final after collecting his second booking of the tournament in the victory over Poland on Thursday.
Yet the 24-year-old will have every right to feel aggrieved as UEFA's expansion of the tournament means that the bookings amnesty begins at the semi-final stage - something that Carvalho has fallen foul of after getting booked twice in five matches.
The defensive midfielder picked up his first booking in Portugal's extra-time victory over Croatia in the round of 16 for a foul on Marcelo Brozovic and had his name taken by referee Felix Brych when he impeded Grzegorz Krychowiak in second-half injury-time.
Carvalho has had plaudits heaped on him throughout the tournament and will be a notable absence in a side that has shipped six goals on their way to the tournament's last four.
Will Portugal ever win a Euro 2016 game in 90 minutes?
Portugal have taken advantage of Euro 2016's expanded format by reaching the final four - even though they have not won a match in normal time. They only finished third in a weak group after drawing 1-1 with Iceland; 0-0 with Austria; and 3-3 with Hungary. They then needed a 117th-minute goal from Ricardo Quaresma to see off Croatia in the last 16 before Thursday night's penalty drama.
It's a stark contrast with Poland, who weren't behind for a single minute of the tournament before their heartbreak in Marseille. But Portugal are the masters of reaching the final four in this competition having done so five times in total and four times in the last five editions. However, history tells us they have only got past that stage once - in 2004 when they lost to Greece in their own country.