The Greek outfit ended up claiming a 90-77 success - their fourth straight victory in the competition.
Milan, who are now on an eight-match losing run in Euroleague, led 72-65 with three minutes to go in the fourth quarter.
However, a 7-0 run for the hosts forced the match into overtime which saw Panathinaikos power to a thrilling victory.
Dwayne Bacon was the player of the match having put 22 points on the board.
Following the match, he told Greek news outlet NOVA: "I'm not trying to score 40 points. I try to fulfill my duties in offense and defense in every match. I will help my team by scoring according to what the opposing defense gives.
"We had a tough game. At one point I wanted to come aside myself to concentrate and see what the error was. I think this helped me because when I came back I felt a lot of things had improved. We had to play well, and that's what happened."
He added: "Paris Lee is the reason I'm here. He is a player who works very hard and sacrifices for his team. Tonight was incredible and I trust him. You saw that in some key moments of this match.
"I'm working hard to be a complete player. I'm happy to come to be the leader of a team. We used to go through tough times with Sasa Obradovic in Monaco , but he trusted me.
"I am grateful to have had a hand in his success over the past year. Hopefully this year it will improve further and we can build on it."