After a remarkable 90 minutes of football which saw Nedim Bajrami, Mohamed Diomande and Danilo score for the Light Blues and Greg Taylor, Daizen Maeda and Nicolas Kuhn find the net for Celtic, extra time produced no further goals so penalties were required.
With James Tavernier, Ianis Hagi, Danilo and Jack Butland scoring from the spot and Ridvan Yilmaz’s penalty saved by Kasper Schmeichel, Celtic were ruthless in the execution, netting all five to lift the League Cup.
Hampden was a cauldron as the match kicked off and on four minutes, Tavernier floated the ball up towards Hamza Igamane - similar to his assist for the striker’s goal against Spurs in midweek - and when Celtic defenders Cameron Carter-Vickers and Alistair Johnston collided in the air, Hagi took up possession inside the 18-yard box.
The Romanian’s cut-back cross from was parried by Schmeichel but there were no takers in blue and the ball was punted clear.
With the atmosphere electric in the stadium as expected, Celtic created their first opportunity of note of 14 minutes when Paulo Bernardo released Nicolas Kuhn on the right flank.
The winger used his pace to dart past Robin Propper and as he tried to around Butland the big keeper stuck out a leg to take the ball away from the German but it then fell to Reo Hatate just outside the box. He tried his luck first time but Butland was there again to make an important stop.
The opening 20 minutes were end-to-end and next up to have an effort on goal was Leon Balogun, the big defender doing well get his head to Tavernier’s cross but it just lacked the power to beat Schmeichel, who dived to his right to make a comfortable save.
Prior to the half-hour mark Celtic were being allowed to pass the ball around and dictate the play, with Phillipe Clement scribbling a few notes into his notepad for his half-time team talk.
But at this point of the match neither team had really come close to breaking the deadlock, with a killer pass or cross missing from any promising moves in the attacking areas.
On 40 minutes, however, Rangers changed all that when they got their noses in front through Bajrami. A slack pass from Greg Taylor allowed the Albanian to sprint clear and he then fed the ball to his teammate Igamane.
The striker hit a low shot from 20 yards which Schmeichel got his right hand to, but he could only push it back the on-rushing Bajrami who rolled the ball into the empty net to spark wild scenes in the blue end of the national stadium.
After the break Celtic quickly showed their intent to get back into the game with Liam Scales, a half-time substitute for Auston Trusty, glancing a header inches wide of Butland’s far post from a Bernardo free-kick delivery.
Rangers then could, and should, have doubled their advantage when they found themselves in a 3 v 1 situation at the back, but the final ball was poor and the Light Blues had to settle for a corner kick at the end of a promising situation.
This missed opportunity was to come back to haunt Clement’s players as Celtic equalised with 56 minutes on the clock – Taylor’s left-foot strike taking a slight nick off Raskin’s boot before it nestled in the corner of the net.
Four minutes later and Brendan Rodgers’ side had the lead. A header from Nico Raskin to Balogun was intercepted by Maeda who only needed one touch before he fired the ball low past Butland at the Celtic end of the ground.
Rangers now had to find a way back into the contest and on 71 minutes a bullet shot from Vaclav Cerny from distance brought out another good save from Schmeichel, with the Dane this time covering his left-hand post.
The Celtic goalkeeper was then at his very best to deny Mohamed Diomande as the Gers playmaker tried to find the opposite top corner of net with an audacious attempt.
With 15 minutes of the match to go, the same player then grabbed a dramatic equaliser for the Light Blues to set up a pulsating end to this epic Old Firm battle.
Igamane’s delivery from the right wing landed at Diomande’s feet and with his back to goal, he showed strength to turn his marker brilliantly and squirm a shot from six yards into the net before celebrating in front of the jubilant bears.
With three minutes on the ninety remaining Celtic got their third goal. Kuhn carried the ball forward and played in Engels down the right channel. He cut the ball back to Kuhn in the box who drilled a shot past Butland.
Most in the stadium would have thought that was game over, but Rangers – and substitute Danilo - had other ideas. Within 60 second after going behind, Cerny provided a sumptuous cross with his left boot and the Brazilian soared above the Celtic defence to head home and make the score 3-3 at full time.
Four minutes into extra time and a pull from Scales on Cerny on the edge of the area had Rangers fans shouting for a penalty, but referee John Beaton awarded a free-kick, which Tavernier curled over the bar.
With this energy-sapping derby starting to take its toll, it was now a test of endurance and fitness as much as skill, and with no further goals scored a penalty shootout, at the Rangers end of the stadium, would decide the winners.
James Tavernier was first up and made no mistake before Adam Idah showed composure to make it 1-1. Ianis Hagi then drilled home from 12 yards, finding the corner with Schmeichel going the correct way, before Callum McGregor made it 2-2.
Danilo was next to step up and he sent the keeper the wrong way before Arne Engels took it to 3-3.
The pivotal moment came when Schmeichel got down to deny Ridvan before Hatate blasted it home to make it 4-3 to Celtic.
Remarkably, Jack Butland was next up and the big keeper hit a brilliantly penalty before Maeda scored Celtic’s fifth, winning the game for his side.
CELTIC: Schmeichel, Johnston (Ralston 70), Taylor (Valle 90), Trusty (Scales 46), Furuhashi (Idah 76), Kuhn (Forrest 105), Carter-Vickers, Bernardo (Engels 70), Maeda, Hatate, McGregor
SUBS NOT USED: Sinisalo, Palma, Yang
BOOKINGS: Furuhashi, Carter-Vickers, Scales
RANGERS: Butland, Tavernier, Propper, Balogun (Sterling 66), Jefte (Yilmaz 60), Raskin, Diomande (Barron 105), Hagi, Cerny (Dowell 105), Bajrami (Danilo 85), Igamane (Dessers 101)
SUBS NOT USED: Kelly, King, McCausland
BOOKINGS: Balogun, Jefte, Raskin, Tavernier, Igamane, Dessers, Sterling