World number 133 Gil was the first Portuguese player to reach the Estoril final, and the convincing way he won his first game without losing a point made the home crowd believe he could upset an opponent 99 places above him in the rankings.
Montanes, who knocked out world number one Roger Federer on Saturday, took control by breaking in the fifth and seventh games to take the first set.
The 29-year-old Spaniard looked set to clinch the match with a succession of finely-placed drop shots and backhand cross-court drives but Gil saved two match points at 5-4 and, with the crowd behind him, bounced back to win the tiebreak.
With Montanes rattled, the 25-year-old Portuguese raced to a 3-0 lead in the third set. Montanes regained his composure, however, and with Gil tiring after having played two lengthy matches in the last two days, the Spaniard stepped up the pace to close the match.
Sharapova ousted
Former world number one Maria Sharapova suffered a setback on her return from injury when she lost 6-4, 6-3 to Lucie Safarova in the first round of the Madrid Open on Sunday.
Russian Sharapova, the 11th seed, was playing her first tournament since pulling out of the Sony Ericsson Open in March with an elbow injury.
Safarova broke Sharapova's serve four times on the clay and the Czech is on course for a possible last-16 clash with sixth-seeded Russian Elena Dementieva.
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