The match finished at 3-3 at the end of 90 minutes before Australia kept their nerve from the spot to secure a 5-3 victory.
The Aussies trailed 1-0 at half-time and looked to be in deep trouble when Vietnam doubled their advantage just 10 minutes into the second stanza.
John Roberts pulled a goal back from the spot just before the hour mark to give Australia some hope.
Vietnam looked to have sealed the result in the 77th minute with a clinical finish making the score 3-1.
But Australia refused to lie down and got back into the contest with substitute Mark Moric slotting home in the 83rd minute to set-up a thrilling finish.
And the Aussies completed a stunning turnaround in stoppage time with Roberts pouncing on an error from the goalkeeper to level the scores at 3-3 and sent the game to a shootout.
90 +1' | GOAL!!! Keeper spill and Roberts heads home to tie the game up! 3-3— FFA CoE (@FFACOE) July 23, 2016
Aussie keeper Noah James pulled off a vital save midway through the shootout to give Australia a 3-2 advantage.
And after both sides converted, substitute Bryce Bafford stepped up and coolly dispatched his penalty to hand Australia a stunning win.
This article was originally published at: http://www.footballaustralia.com.au/article/joeys-crowned-aff-u-16-champions-after-incredible-comeback/y338r7l3f41v19lz3mc2b8zpm.