In doing so, the midfielder atoned for a rush of blood in the penalty area at the other end when he flattened Christophe Dugarry and handed Paul Devlin the chance to level Robbie Keane's cheeky opener.
Poyet's intervention just three minutes from time clinched a vital win after a run of three straight Premiership defeats.
It all started so well with Keane's opportunist effort to open the scoring inside five minutes.
Keeper Andy Marriott gathered a long pass as a move broke down, Keane trotted behind the goalkeeper, obviously unseen, and as Marriott put the ball down to kick off the floor, rather than out of his hands, Keane nipped in and tapped into an open goal.
That naturally lifted the side and a bright 20-minute spell followed with the triangle of Keane, Simon Davies and Steve Carr working well down the right flank.
Poyet went close from Darren Anderton's corner after 15 minutes and Davies, onto a long ball, fed Anderton and his shot flashed across goal.
Birmingham, slightly more measured than expected, came more into the game midway through the half and Kasey Keller was forced into the save of the half after 28 minutes as the visitors attempted to turn the tables on us with their own 'Sheringham corner', met by Dugarry, tipped onto the post by Keller.
Seconds later, Matthew Upson's close range effort was blocked by a combination of Keller and the outstanding Ledley King.
The rest of the half was played out in midfield, livened only when Stern John was booked for diving in the penalty area and Carr and Dugarry enjoyed a niggly couple of minutes before the whistle.
The second half didn't quite catch fire and looked to be going the wrong way until Poyet's glorious late strike.
We started well again as efforts from Poyet, Perry twice, Sheringham twice and Bunjevcevic only tested Marriott once - a fine tip over from Bunjevcevic's 25-yarder.
But, like in the first half, City clawed their way back in. Horsfield's flick from Clemence's in-swinging corner was cleared off the line by Taricco and the visitors were level two minutes later when Poyet climbed all over Dugarry in box and Devlin smashed penalty straight down the middle.
Sheringham's header went straight at Marriott and it looked like a point apiece until Keller's long clearance with three minutes left went all the way through to Poyet who smashed a dipping volley into the top corner.
MINUTE BY MINUTE GUIDE
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1min: YELLOW. Bunjevcevic for stopping free-kick being taken.
1min: CHANCE. From free-kick, Dugarry won big header at far post, Horsfield held off Perry, turned and shot wide from tight angle.
5mins: GOAL. Opportunist goal from Keane. A move broke down, Marriott picked up the ball, didn't notice that Keane had continued his run from the previous move, put it down to kick off the floor and Keane nipped in to tap into an empty net. 1-0.
15mins: CLOSE. Poyet's header from Anderton's corner headed off line by Upson.
18mins: Davies onto ball over the top, slipped it to Anderton, his drive flashed across goal.
19mins: Horsfield power opened up a chance but volleyed just wide.
28mins: SAVE/WOODWORK. Clemence turns the tables with Birmingham's own 'Sheringham corner' met by Dugarry, superbly tipped onto the post by Keller.
28mins: CLOSE. From same move, Upson's close-range effort cleared by combination of King and Keller.
37mins: YELLOW. John for a dive in the box.
Half-time: Spurs 1-0 Birmingham City
49mins: Horsfield back-flick from Clemence's corner landed on roof of the net.
52mins: Poyet volleyed wide from 22 yards.
55mins: Perry headed wide deep Anderton corner.
55mins: SUB. Lazaridis for John.
56mins: SAVE. Bunjevcevic's 25-yarder tipped over by Marriott.
57mins: CLOSE. Identical corner, deep Anderton cross headed a fraction over by Perry.
60mins: Sheringham screamer from 30 yards just wide.
72mins: Decent move, lorts of passes, ended with Sheringham's dipping volley bouncing a yard wide.
73mins: OFF LINE. Horsfield flick from Clemence in-swinging corner cleared off the line by Taricco.
75mins: PENALTY/GOAL. Poyet climbed all over Dugarry in box. Devlin smashed penalty straight down the middle. 1-1.
80mins: CHANCE. Sheringham wrestled some space to meet deep Carr free-kick but header straight at Marriott.
83mins: SUB. Etherington for Taricco.
85mins: SUB. Kirovski for Dugarry.
87mins: GOAL. Long clearance by Keller met by cracking volley from Poyet into top corner. 2-1.
Injury time: SUB. Carter for Kenna.
Line-ups: Spurs: Keller, Carr, Taricco (Etherington, 83), Bunjevcevic, King, Perry, Anderton, Davies, Poyet, Keane, Sheringham. Subs: Sullivan, Doherty, Acimovic, Toda.
Birmingham City: Marriott, Kenna (Carter, 90), Devlin, Horsfield, Cunningham, John (Lazaridis, 55), Dugarry (Kirovski, 85), Johnson, Clapham, Upson, Clemence. Subs: Davies, Johnson.
Gus Poyet played the role of hero and villain as his magnificent late volley re-ignited our dreams of a late push for Europe.