The Tipperary side beat the reigning champions Sheriff YC of Dublin- who themselves were aiming for a third straight title- 1-0 at Celtic Park in Clonmel.
In a dour, edgy game, it took a 25 yard lob from St. Michaels full-back Brian Buckley in the 84th minute to split the sides.
Jason Purcell's men survived the nervy final minutes, while Sheriff were reduced to 9 men.
St. Michaels- who haven't won the cup since 1974- will face Ballynanty Rovers in an all-Munster final.
The Limerick side beat Collinstown FC on Saturday night on penalties at Jackman Park.
The FAI Junior Cup Final will take place at the Aviva Stadium on the 25th of May, just before Ireland's international friendly with Turkey.