The 10-time winners needed victory in the fifth match by women's doubles pair Chen Qingchen and Jia Yifan to seal a 3-2 win over the 2015 finalists Japan.
Chen and Jia prevailed 21-12, 21-19 over the Japanese duo Misaki Matsutomo and Ayaka Takahashi after a 49-minute tussle.
South Korea, who beat China for their last Sudirman Cup title in Eindhoven in 2003, won the other semi-final 3-1 over Thailand.
Japan took China all the way with wins in the mixed doubles through Yuta Watanabe and Arisa Higashino 21-12, 14- 21, 21-19 over China's Zheng Siwei and Chen Qingchen and in the women's singles with Akane Yamaguchi over Sun Yu 21-17, 21-15.
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Sung Ji Hyun defeated Ratchanok Intanon in the fourth match of the semi-final tie 21-13, 21-17 to clinch passage to the final for South Korea.
Dechapol Puavaranukroh and Sapsiree Taerattanachai gave the Thais the opening match winning their mixed doubles, 21- 16, 21-12 against Choi Solgyu and Chae Yoo Jung in 41 minutes.
All the pressure was on Korea's men's singles spearhead Son Wan Ho, but he came through to overcome Suppanyu Avihingsanon, 18-21, 21-10, 21-17.
The Thai however was way below her best, unable to stick in the rallies that Sung forced her into.
"It is just amazing," South Korean head coach Kang Kyung Jin said.
"We've made history. This year our team was called weak. At the last minute our senior men's doubles players left the team. We targeted the quarter-final. Now we are so happy.