The decisive moment came just before half-time at Emirates Stadium, where Bukayo Saka struck in the 44th minute to settle a tense semi-final against Atletico Madrid.
The winger reacted quickest to a rebound after Jan Oblak parried a shot from Leandro Trossard, with Viktor Gyokeres involved in the build-up.
With the tie finely poised at 1-1 after the first leg, Arsenal edged the contest 2-1 on aggregate, though not without moments of defensive resilience.
Declan Rice produced a vital tackle to deny Giuliano Simeone, while Gabriel Magalhaes recovered superbly after the forward rounded David Raya.
Arsenal had chances to extend their advantage, notably when Gyokeres fired over from inside the area following a delivery by substitute Piero Hincapie, but ultimately their defensive discipline proved decisive.
The North London side's progression marks a significant step forward after last season's semi-final exit to eventual winners Paris Saint-Germain. Their last appearance in the final came in 2006, when they were beaten by Barcelona.
"It's an incredible night. We made history again together. I cannot be happier and prouder of everyone involved in this football club," said Gunners boss Mikel Arteta.
"The manner that we got to see outside the stadium was special and unique. The atmosphere that our supporters created, the energy, the way they lived every ball with us, it made it special and unique.
"I never felt that in the stadium. We knew how much it meant to everybody. We put everything in, the boys did an incredible job.
"After 20 years and for the second time in our history, we are back in the Champions League final."
Arsenal will now face either Bayern Munich or PSG in the final, scheduled for 30 May in Budapest, as they pursue their first-ever Champions League title.
Paris Saint-Germain head into a decisive night at the Allianz Arena determined to stay true to their attacking identity, with manager Luis Enrique insisting his side will attack Bayern Munich.
Kai Havertz and Martin Odegaard will both be available for Arsenal's Champions League semi-final second leg against Atletico Madrid as the Gunners aim to reach their first final in the competition since 2006.
Bayern Munich face a finely balanced task in their UEFA Champions League semi-final against Paris Saint-Germain after a dramatic first-leg defeat, but Thomas Muller is optimistic.
Arsenal manager Mikel Arteta heaped praise on his players performance in 3-0 victory over Fulham in the Premier League clash at Emirates Stadium on Saturday.
