Asia's number one ranked team will play either defending champions China or arch-rivals Japan in Sunday's decider as they go in search of a third title as the perfect warm-up for the Olympics in August.
"This match was not easy for us," North Korean coach Kim Kwang-min told reporters.
"Australia have a very strong team that are very skilful but our players showed a great spirit to win."
Australia coach Tom Sermanni had no complaints with the result.
"North Korea were considerably better than we were in every area of the field and they out played us for most of the game," he said.
"But our aim was to get to the semi-finals and we have done that, so in that sense I am quite pleased with what we have achieved."