The two rinks were the strongest throughout the round-robin phase and they will now contest a re-run of the Vancouver 2010 final – won by Sweden – at Sochi’s Ice Cube Curling Centre on 20 February.
Great Britain and Switzerland will meet earlier the same day to determine the destiny of the bronze medal.
Canada, undefeated in the round-robin, established a 3-0 lead over Eve Muirhead's British rink aftr the first two ends, before being pegged pack to 3-2. The Vancouver 2010 silver medallists preserved their one-point lead going into the break at 4-3.
A tightly contested contest saw just one point in the next three ends, with Canadian skip Jennifer Jones extending the lead to 5-3 in the sixth.
And Great Britain then upped the tension, taking advantage of a failed double take-out from Jones to reduce the deficit to a single point and set up a dramatic finale.
With last stone advantage in the final end, Jones drew her last stone into the four foot ring and inside two British stones to take another point to make it 6-4 and hand Canada a tenth straight victory and a chance to win their first gold in the event since Nagano 1998.
A dream come true
“Amazing - it’s a dream come true!” said Jones. “The whole Olympic experience has been a dream come true and now that we’re playing in the gold medal game - that’s all you could ask for in sport. It was a great team effort.”
Muirhead, meanwhile, was understandably crestfallen, but still paid tribute to her opponents: “We're gutted - we gave it our all out there. We said at the start of the week we wanted to leave here with no regrets and we did give it 110%,” she said.
“We didn't play badly at all, but Canada played extremely well… And what a great last shot by Jennifer [Jones] under pressure,” concluded the British skip.
Last stone drama
In the other semi-final, Switzerland and Sweden took turns to take the lead throughout the match, with never more than one point between the teams until the very last stone.
With the scores level at 3-3 at the halfway point, Sweden then blanked the sixth end, before edging into a 4-3 lead in the seventh.
The pendulum then swung towards the Swiss, who scored a double in the following end to lead 5-4.
It was then Sweden's fourth player Maria Prytz who stepped up to the plate, producing an inspired two-pointer to regain the momentum for her rink.
In the tenth end, Switzerland's skip Mirjam Ott herself missed the chance to claim two points and win the match, leaving Sweden with the chance to swoop for the steal and a 7-5 win.
Golden hat-trick beckons
“It just feels amazing to win this game. We are so proud and happy,” reacted Sweden skip Margaretha Sigfridsson.
“It’s great to know we are guaranteed a medal because we can just go into the final and do our best,” added Sweden’s fourth player Maria Prytz. “We’re going for gold now. It’s going to be a good game against Canada.”
Meanwhile, Switzerland skip Mirjam Ott, who will be competing in the bronze medal match for a second Games running, said the main objective now was to put disappointment behind them and focus on their match against Great Britain.
“We had a really good game and played really well and it came down to those last three rocks,” she said. “We know that they are a strong team, it was really a good game, a tough game… We have enough time to lift ourselves for the bronze game.”
Sweden will now be aiming to complete a hat-trick of successive Olympic titles, and emulate the achievements of Anette Norberg’s rink, which took gold in 2006 and 2010.