Houston Dash attacker Thembi Kgatlana and Lebogang Ramalepe emerged heroines for Banyana Banyana at the Cape Coast Stadium as their strikes set up a final date with eight-time champions Nigeria on Saturday.
The result also secured Desiree Ellis' outfit a qualification ticket for the 2019 Fifa Women's World Cup in France.
South Africa coach Desiree Ellis made one change to the side that settled for a 1-1 draw with Zambia in their last group game, restoring Jermaine Seoposenwe to the XI for Busiswe Ndimeni.
Mali coach Mohamed Saloum Houssein, on the other hand, introduced three new faces in his starting XI. Binta Diarra, Yakare Niakate and Djenaba Baradji took the places of Lala Dicko, Aminata Doucoure and Agueissa Diarra for the last-four fixture.
Banyana Banyana captain Janine Van Wyk launched the first attempt on goal with a third minute free-kick before Nothando Vilakazi curled another set-piece over the bar moments later.
On 31 minutes, South Africa registered the opening goal through none other than tournament top scorer Thembi Kgatlana, who took her tally to five.
After Rafiloe Jane seemingly misdirected a lofted ball, the USA-based attacker pounced on a sliced clearance by Salimata Diarra and released a close-range shot which just bobbled into the bottom left corner of the net.
Mali's closest goal attempt of the first half came in stoppage time when Diarra's shot flew wide, shortly after Bassira Toure's grounder was cleared out when South Africa goalkeeper Kaylin Swart fumbled with a free-kick.
There were even less clear-cut chances for either side after recess.
Linda Motlhaho's 75th minute shot from outside the box was the first real test for Mali goalkeeper Adoudou Konate.
Then there was a goal out of nothing for South Africa when Ramalepe caught Konate by surprise with a thunderbolt from outside the box.
Mali tried to mount a late fightback but Banyana Banyana resolutely held on for a famous victory.
Les Aiglonnes will face Cameroon, who lost 4-2 on penalties to Nigeria in the first semi-final, in the third-place playoff on Friday.
The winner of the penultimate tournament fixture will also join the two finalists for the 2019 Fifa Women's World Cup.