The Juventus goalkeeper was on top form to keep out efforts from Diego Forlan, Martin Caceres and Walter Gargano as the Azzurri won on penalties to finish in third place
Davide Astori slotted home Italy's opener after an unfortunate deflection off the goalkeeper, before Edinson Cavani's slotted finish restored parity.
Two brilliant free kicks, from Alessandro Diamanti and Cavani late in the second half added to the score, before an entertaining match was settled on penalties after a competitive extra-time period.
In the shoot-out, Diego Forlan saw his effort saved by Gianluigi Buffon, before further misses from Walter Gargano and Martin Caceres saw Cesare Prandelli's men claim third.
Despite the extra day of recovery, Uruguay were forced to defend early on in the contest with Giorgio Chiellini glancing a header narrowly wide after a good delivery from Diamanti.
Minutes later, Daniele De Rossi produced a fine pass to set De Sciglio free down the flank, with the latter supplying a dangerous low ball into the box, allowing Antonio Candreva to fire a tame shot at Fernando Muslera in the best of the opening exchanges.
But Italy continued to pose a few problems for la Celeste, and were deservedly ahead halfway through the first period, though who would actually be credited with the goal provided a bit of controversy and a moment of history.
Diamanti's fine set-piece from the right slammed against the crossbar, before taking a cruel blow off the back of bamboozled goalkeeper Muslera. After bouncing on the line Astori made sure, tapping the ball into the net to hand the Azzurri the lead, with goal-line technology subsequently used for the first ever time to determine the goalscorer.
Oscar Tabarez's side rallied following that setback. First, Luis Suarez fired a testing effort at Buffon which the Italy keeper smartly tipped over the bar, before Cavani's headed goal from Forlan's free kick was ruled out for offside.
There continued to be chances at both ends. El Shaarawy picked up a loose ball from distance before striking on the half volley from 25 yards, only to see Muslera turn it behind. Uruguay then had a shout for a penalty after the ball bounced up on Chiellini, but referee Djamel Haimoudi thought otherwise.
Uruguay grew in confidence in the second half, and soon equalised. Walter Gargano led the surge through the midfield before picking out Cavani with a fabulous pass, slipping the ball behind the defenders, before the Napoli forward coolly curled a low finish past Buffon.
The South Americans continued in the ascendancy, and were somehow kept out by a supreme double save from Buffon. Forlan capitalised on a neat pass to launch a stinging effort at the Italy captain, who produced a world-class stop to keep Italy in the game.
But it was the Azzurri who then went ahead when Diamanti curled home a fabulous free kick on 73 minutes.
Remarkably, just moments later, it was 2-2 with Cavani repeating the trick with a sumptuous 30-yard dead ball effort which beat Buffon as the game progressed towards extra-time.
The additional 30 minute period failed to separate the teams once more, but Montolivo was sent off for a second bookable offence following a clumsy trip on Suarez, though Uruguay failed to capitalise on their advantage as the match was eventually settled on penalties.
Emanuele Giaccherini capitalised on three misses from Uruguay to slot home Italy's third in the shootout, and claim victory in what has been a positive tournament for Italy ahead of next year's World Cup.