Kyle Walker, John Stones and Phil Foden started the sixth successive match for the Three Lions as they came from a goal down to secure progression thanks to Ollie Watkins’ goal in the 90th minute.
However, it was heartbreak for Nathan Ake and the Dutch who exited at the semi-final stage.
Gareth Southgate’s side’s victory confirms a City-centric Euro 2024 showpiece in Germany after Rodrigo helped Spain reach the final on Tuesday after La Roja beat France 2-1 in the tournament’s other last-four tie.
The final of the prestigious competition will take place at Olympiastadion, Berlin on Sunday 14 July – with kick-off scheduled for 20:00 (UK).
In Borussia Dortmund’s electric amphitheatre, Xavi Simons lit the orange touch paper when he retrieved possession and unleashed an unstoppable rocket into the top corner from 25-yards after just seven minutes.
Undeterred after conceding the opener, England immediately pressed for an equaliser as Harry Kane stung the palms of Bart Verbruggen before Bayern Munich’s forward lashed another chance over the bar.
However, after consulting with VAR, the referee awarded the Three Lions a penalty after Denzel Dumfries was adjudged to have caught Kane when the latter aimed to fire home.
The 30-year-old stepped up and fired a venomous, low effort into the net to level on 18 minutes.
Buoyed by their equaliser, Foden came inches from handing his nation the lead when he received the ball from Kobbie Mainoo inside the area before he squeezed it under Verbruggen - only for Dumfries to recover well and control on the goal-line.
Despite continued England pressure, the Netherlands showed they packed quality aplenty on the counter and the ball broke to Memphis Depay who drove forward before Walker utilised his blistering pace to get across and thwart the forward’s finish.
From the resulting corner, though, Dumfries rose high and sent a header bouncing off the crossbar.
The semi-final clash continued to be played a breathless pace and it was Foden again dictating the tempo before he produced a trademark spin on the edge of the area and stung the post with a dart from range.
Following the interval, the tempo and intensity of the tie changed and dipped as both managers shuffled their packs.
Koeman opted to rearrange his midfield rubik’s cube, meanwhile Southgate introduced Luke Shaw onto the pitch – replacing Kieran Tripper.
And it almost paid dividends for the Dutch when a viciously whipped free-kick into the box saw Virgil van Dijk force a reaction save from Jordan Pickford with a poked half-volley.
With the Netherlands looking to reach their first EUROs final since 1988 and England in search of their maiden honour since the 1966 World Cup, the closing stages were cagey with neither side looking to make unforced errors.
But Southgate’s side thought they had taken the lead when Walker burst down the right and squared the ball to Saka who tapped home - only for the offside flag to raise on City’s defender who was narrowly beyond the last Dutch player.
On the cusp of full-time, though, Ollie Watkins euphorically fired England into the lead when he collected the ball inside the area, took a touch and drilled into the bottom corner.
It means England and their City trio will lock horns with Rodrigo and Spain for the European Championship on Sunday 14 July, with kick-off scheduled for 20:00 (UK).
Stay close to mancity.com and our official app for a City-centric report on proceedings from Olympiastadion.
