A fourth quarter defensive burst from England separated the deadlock as the Roses pulled clear of the New Zealand side in Cape Town on Saturday.
Both teams felt the extreme pressure of the occasion in the low-scoring match, with the sides unable to be split after three quarters.
England made their decisive move late in the final quarter with a spectacular intercept from goal defence and player of the match Fran Williams.
The slender lead gave the Roses the confidence to push on as their play became more fluid into outstanding shooters Helen Housby and Ellie Cardwell.
The New Zealand team's campaign was rocked by the the loss of their key tall target Grace Nweke who limped off in their match against Singapore a week ago.
While the 20-year-old goal shooter with an exceptional vertical jump was initially expected to be sidelined for a match or two, scans revealed ligament damage.
Silver Ferns coach Dane Noeline Taurua used her most experienced line-up in Nweke's absence with Maia Wilson at goal shoot partnering Ameliaranne Ekenasio at goal attack.
The midcourt trio of Gina Crampton, Kate Heffernan and Karin Burger were the stand-out performers in the New Zealand side.
Goal keep Kelly Jury secured key possession for the Ferns with Phoenix Karaka's only blemish being a wayward pass at the death.
"It was really disappointing the way we fell away at the end," Heffernan said.
"Just to fall away and let them kind of get away at the end is really gutting.
"We worked hard and we were so close and that's what hurts. They were physical, we knew it was going be like that.
"In that moment we did get isolated. It's a bit gutting that at the end we fell away from each other on attack when that's when you really do need to come together.
"We've got to help each other get those backpacks off, but credit to them, they showed in the last quarter that they really wanted it."
It's the first time the England have reached the World Cup final and they'll face Australia for the title after the Diamonds beat Jamaica 57-54 in their semi-final on Saturday.
An emotional England defender Layla Guscoth told BBC Sport she was thrilled.
"I can't believe it," she said.
"We've had so much criticism over the last year [after no medal at the 2022 Commonwealth Games]. We are so grateful to get the chance to play in a World Cup final. We celebrate, we rest and we come back tomorrow."
New Zealand will play Jamaica for the bronze medal.
