The decisive moment came in the 95th minute when Sophia Smith, the 23-year-old forward, latched onto a pass from Mallory Swanson and skillfully slid the ball past Germany's advancing goalkeeper, Ann-Katrin Berger.
Up until that point, the US team, led by former Chelsea manager Emma Hayes, struggled to break down a determined German defense, despite having beaten them 4-1 in the group stage.
Germany, who won the gold medal at Rio 2016, nearly forced the match into penalties. In the 119th minute, Laura Freigang's powerful header was brilliantly saved by US goalkeeper Alyssa Naeher.
The US will now face Brazil in the final at the Parc des Princes on Saturday at 16:00 BST. Meanwhile, Germany will compete for the bronze medal against Spain in Lyon on Friday.