Ragnar Sigurdsson(2nd, R) of Iceland competes during the Euro 2016 round of 16 football match between England and Iceland in Nice, France, June 27, 2016. [Photo/Xinhua]

PARIS - Iceland pulled off one of the biggest shocks in the history of European Championship when they defeated England 2-1 while the European dominant force Spain were downed by Italy 2-0 in the last 16 clashes at Euro 2016 on Monday.

Iceland, the smallest country ever to appear in a major tournament, will continue their run at EURO 2016 and face France in the quarterfinals.

England were knocked out although they took the lead in the fourth minute as captain Wayne Rooney fired a penalty kick into the bottom right corner after Raheem Sterling had been brought down by Iceland goalkeeper Halldorsson.

But Iceland levelled the score two minutes later. Kari Arnason nodded a huge throw-in for Ragnar Sigurdsson to slot home from close range.

England were in control of the game but Iceland made it 2-1 in the 18th minute from their only second meaningful attack. Their striker Kolbeinn Sigthorsson fired home from the edge of the box and England keeper Joe Hart got his left hand to it but could not stop the ball flying into the net.

Roy Hodgson has announced his resignation as England manager after his side suffered a shock 2-1 loss to Iceland.

"I'm extremely disappointed about tonight's result and ultimately our exit from the competition," Hodgson said at the post-match press conference. "We haven't progressed as far as I'd thought we were capable of and ultimately it is not acceptable."

At Saint-Denis, Italy ended defending champions Spain's bid for a record third successive European title with a 2-0 victory.

Juventus defender Giorgio Chiellini opened the scoring in the 33rd minute when Inter Milan striker Eder stepped up to rifle a bullet free-kick at goal. Spain keeper David de Gea blocked the shot but Giaccherini dashed into the goalmouth melee to pounce home on the rebound.

Southampton forward Graziano Pelle sealed the win in the 92nd minute when Italy caught Spain on a counter-attack with substitute Matteo Darmian making his way deep down the wing before smashing a deflected cross into the box through Spain captain Sergio Ramos' legs. Pelle volleyed home from the edge of the six-yard box.

The victory meant Italy avoided a third consecutive elimination at the European Championship to Spain and secured a quarterfinal clash against Germany.