Having downed world No10 Hubert Hurkacz in Vienna a fortnight ago, the Scot faced the new holder of the ranking on Wednesday and secured a 7-6 (7-4), 6-3 victory.
Sinner, 20, is one of tennis’ top prospects but was undone in a tie-break after an incredibly tight first set before Murray broke early in the second and held on to reach the quarter-finals.
After the match, the 34-year-old stated his confidence that he can compete with the sport’s elite once again – if he avoids injury.
“A very tough match and he hits the ball huge from the back of the court, so a lot of rallies and a lot of running but it’s probably my best win of the season,” said Murray, “I want to keep [the momentum] going now.
“If I want to move back up the rankings and have good runs in tournaments again I need to win these matches.
“I’ve played a lot of guys ranked between three, four in the world to 15, 16 – I’ve won a couple of them but I’ve lost quite a few. So it’s good to start turning those matches around.
“I still think I have a lot to offer, I don’t know what it is in terms of percentage but I’m still able to compete and win matches against the top ten in the world. If my body stays good and I’m able to build momentum, I believe I can get right up there again.”
Murray faces American Tommy Paul in the next round, with Dan Evans also in the hat after beating Alejandro Davidovich Fokina.
“Ideally you want to have a long-term view but I’m also aware that another injury could be the end,” he continued. “So I want to try and make the most of every single week and be as competitive as I can.
“Every week is important for me.”