A frantic start to the game saw Socceroos defender Trent Sainsbury head over the bar after just four minutes as he was left unmarked following a corner.
The UAE suffered an early blow with Mohamed Ahmad forced off through injury in the 18th minute and was replaced by Khalifa Alhammadi.
After being the shoot-out hero against Uzbekistan, Maty Ryan produced a fine save in the 21st minute after Ismael Al Hamadi split the Socceroos defence apart to get a shot away.
The green and gold ended the first-half on top but failed to find the all important opener as UAE's defence held firm.
Continuing to edge chances after the break, Australia thought they had found the opener through Apostolos Giannou in the 64th minute, only for an offside Mathew Leckie in build-up to deny him.
In reply, UAE would open the scoring with a poor back pass from Milos Degenek allowing Ali Mabkhout to dribble past Ryan and slot the ball home on 68 minutes.
The Socceroos would push hard for an equaliser but struggled to break down their hosts, who sealed their place in a semi-final against Qatar with the 1-0 win.