Ireland looked to be heading for a famous victory over the Italians that would have taken World Cup qualification to the last game after Sean St Ledger put them 2-1 in front three minutes from time but Gilardino popped up to level the scores.
The striker, who came off the bench in the 76th minute to replace Antonio de Natale, silenced the rapturous home crowd as the match crept into stoppage time by poking home Vincenzo Iaquinta's cut back to send his side to South Africa.
"To lose would have been very unfair because we played an excellent match," said Italy coach Marcello Lippi.
"Today we cashed in our first cheque towards the World Cup. We have our first very important achievement which is to create a team psychologically as strong as the one that won the World Cup and this gives me great pleasure and satisfaction."
Ireland had taken the lead after eight minutes when midfielder Glenn Whelan found the top corner from outside the box with a glorious strike to finish a superb set piece move after Liam Lawrence set him up from a freekick on the right.
UNASSAILABLE ITALY
Winger Mauro Camoranesi marked his 50th appearance for the Italians with the equaliser after 26 minutes before St Ledger put the Irish back in front with his first international goal.
But Gilardino's strike means Italy lead Ireland by four points with one match left while third-placed Bulgaria's earlier 4-1 defeat in Cyprus had already put the home side into the playoffs where they could face the likes of France and Russia.
"We are a little bit disappointed with the last three minutes," said Ireland's Italian coach Giovanni Trapattoni. "We are a young team, and this lesson will be a great example for us. With a little bit of experience we could have won."
Ireland, unbeaten in competitive matches since former Italy i Trapattoni took charge last year, had dominated the first period of the match after going ahead thanks to the move crafted by Stoke City team mates Lawrence and Whelan.
Italy only registered their first shot on goal after 25 minutes when defender Fabio Grosso's sweetly struck volley flew straight at Ireland goalkeeper Shay Given.
The lively Iaquinta forced a smart tackle from St Ledger seconds later but from the resulting corner, Camoranesi, one of six Juventus starters, headed the ball powerfully past the flailing Given into the net for his fifth international goal.
The visitors thought they had taken the lead two minutes after the restart when midfielder Andrea Pirlo again caused uncertainty in the Ireland area with another set piece but Iaquinta used a hand in bundling the ball past Given.
Italy still looked dangerous but Ireland, who last beat the Azzurri at the 1994 World Cup, seemed to have put the champions' qualification on hold when St Ledger scored with a diving header at the far post from substitute Stephen Hunt's corner.
It was left to Gilardino to ruin the Irish party.
