A superb semi-final at the Moses Mabhida Stadium was won and lost in a blistering 20-minute first-half spell in which Nigeria scored three goals to leave them dreaming of a first title since current coach Stephen Keshi captained them to glory in 1994.
Goals from defender Elderson Echiejile, who stooped to head home after 25 minutes, Brown Ideye, who scrambled one in after 30 minutes and an own goal from Mali defender Momo Sissoko a minute before half-time put Keshi's team in total control.
They made it 4-0 when substitute Ahmed Musa, who replaced the outstanding Victor Moses after 53 minutes scored three minutes after coming on, beating the offside trap and slipping the ball through goalkeeper Mamadou Samassa's legs.
Nigeria also had the ball in the net for a fifth time shortly afterwards, but the goal was disallowed for offside.
Keshi is now one victory away from becoming only the second man in the tournament's 56-year history to win it as a player and coach. The only person to have achieved the feat is Egyptian Mahmoud El Gohary, who won it in 1959 and 1998.
Mali, who famously came back from 4-0 down to draw 4-4 with Angola in the opening game of the 2010 finals, never looked like repeating that feat but did score a consolation when substitute Cheick Diarra fired home in the 75th minute.
That goal did nothing to dampen the Nigerian celebrations that followed the final whistle as the team booked a place in Sunday's final, where they will meet the winners of Wednesday's second semi between Ghana and Burkina Faso.
Keshi, who spent two years coaching Mali and knows most of their players well, said he was obviously delighted with the victory by his young team, which he said should not be compared to his victorious 1994 team.
"We won in 1994 after we had been together for five years," he told reporters.
"But we have been together for five weeks. We met up for the first time in our training camp in Portugal before the tournament, and it was a young group.
"We worked hard, the atmosphere was wonderful but you cannot compare this team to that. We did play very well today and I am very happy but we haven't won anything yet."
Mali, inspired by the conflict in their homeland, and widely tipped to go one better than last year's semi-final appearance, started better but failed with a trio of early chances and could not find a way back into the game once Nigeria took charge.
One of the reasons Mali were considered such a threat was the form in this tournament of skipper Seydou Keita, who has turned the clock back on his 32 years and given the kind of performances he used to give when he was with Barcelona.
But as hard as he tried on Wednesday, he could not reverse Mali's fortunes against superior opponents on the day.
"We played against a very good team, who were better than us on the day," Keita told reporters.
"And that is difficult to handle, especially as the country back home was looking to us and expecting a victory from us but we didn't win it for them, and that is very
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