Mali dominated the match and scored through Hadji Drame (25th minute), Lassana N'diaye (33rd, 90+4)), Fode Konate (73rd) and substitute Seme Camara (87th).
Iraq showed urgency in the second half and reduced the margin in the 85th minute through Ali Kareem.
Mali controlled the proceeding with a steady flow of passes and, after coming close on a few occasions, took the lead in the 25th minute.
Mali will play against the winners of tomorrow's match between Ghana and Niger.
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The Africian nation maintained the tempo and doubled the lead a few minutes later. A move on the left saw Djemoussa Traore sprint down into the box and he outsmarted a rival defender before sending in a low cross, which N'Diaye capitalised with a diving header.
The well-built Mali players toyed with the rival defence with repeated forays but the Iraqis did well to keep it to 0-2 at the half time.
Iraq, who did not have a clear look at the rival goal, came close to scoring at the stroke of half time when Mohammed Ridha curled in a shot off a free kick, only to be denied by Youssouf Koita.
Iraq pulled one back in the 85th minute through Kareem.
Mali then scored twice to finish off the game. Camara controlled the ball inside the box and hit the target with a left-footer.
N'Diaye completed the rout when he scored his second.
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