The sides were all square at half time on 0-06 each at the Athletic Grounds in a closely fought encounter (throw in 2 pm).
But a succession of late points in the final minutes of the match by Tyrone’s Peter Harte and Kyle Coney helped Mickey Harte’s side win by 0-14 to Derry’s 1-08.
It will be a disappointment for Derry manager Damian McErlaine whose side ran Tyrone close for the majority of the game.
The win has now set up a mouthering tie between Tyrone and Armagh with the Orchard men easing out Donegal by a single point in the other semi-final – Dun na nGall 1-10 v 0-14 Ard Mhacha.
Tyrone started the second half where they left off in the first 35 minutes.
After hitting the first wide of the second half, Darragh Canavan redeemed himself with a great individual point on 40 minutes.
A few minutes later Tyrone extended their lead by two when Kyle Coney fisted over the Derry bar.
With seven minutes gone in the second half, Chrissy Bradley got his fourth score of the game, pointing from 20 metres out.
Three minutes later, Derry got the first goal of the game when Patrick Coney finished off a great move for his side giving the Oak Leafers a two point lead.
But Tyrone were soon back in the game when a free by Peter Harte sailed over the bar.
And after a foul on Cathal McShane, Peter Harte pointed the free from 20 metres out to level the match on 48 minutes – Derry 1-07 v 0-10 Tyrone.
Derry made a substitution on 50 minutes when Niall Toner came on for Chrissy Bradley who score four points in the first half.
This was followed two minutes later with a second sub for Derry, with Gareth McKindless replacing Ryan Dougan.
With ten minutes left on the clock, Tyrone got a free in and from 35 metres out Peter Harte sent his kick over the Derry bar to give Mickey Harte’s side a one point lead.
Derry soon made a third substitution with Declan Hughes coming on for Conor Mulholland.
And with five minutes to go in Armagh, Kyle Coney picked up a yellow card.
Peter Harte picked up his fourth score of the game after a foul on Darragh Canavan and Harte pointed from 13 metres out.
The point gave Tyrone a two point lead and Derry still had a chance to make up the difference with four additional minutes in the game.
The match see-sawed again when from a free. in Shane McGuigan pointed for Derry narrowing the gap to a point.
But Tyrone got their noses back in front soon after when Harte – voted Man of the Match – scored a point from play and Derry hit back when Shane McGuigan pointed from a free kick.
Tyrone increased their lead to three points when Kyle Coney scored in the dying moments.
And that was to be the final score of a great semi-final with Tyrone winning by 1-14 to 1-08.
Derry will be back in action in a fortnight’s time when they take on Antrim in Round 1 of the Allianz League on Sunday, January 27 at Glenavy.