Sandon Smith intercepted a Liam Martin pass and ran 80 metres to score with a minute remaining, sealing Newcastle's 22-14 win over Penrith.
The Knights reached their first grand final in 25 years despite playing the second half with 12 men.
Phoenix Crossland was sent off late in the first half for a hip-drop tackle that caused Nathan Cleary a compound ankle fracture and dislocation.
Cleary had started on the bench because of stress-related bone issues in his right foot, then lasted only 10 minutes after taking the field.
He left on a medicab and was taken to hospital by ambulance; surgery on both feet is expected.
Newcastle trailed 14-6 at halftime before turning the match around.
The Knights will face the Sydney Roosters next Sunday, becoming the first team outside the top four to reach the decider since 2017.
They are seeking a third title, after their 1997 and 2001 premierships, and could become the first team in almost a century to rise from wooden spooners to premiers.
"It feels unreal. It felt weird for me, I got emotional after the game," Knights coach Justin Holbrook said.
Smith had earlier put Newcastle ahead with a 50-metre try after taking a quick tap, while the Knights' defence held firm with a man down.
Penrith also lost Blaize Talagi to an Achilles injury, while Dylan Edwards played with a ruptured PCL.