The Croatian's flat and powerful hitting proved too much for 17-time grand slam winner Federer as he claimed a 6-3 6-4 6-4 win.
Cilic had suffered losses in five previous meetings with Federer, but that mattered little at Flushing Meadows.
The 14th seed mixed 43 winners with 23 unforced errors in an incredible display, setting up a clash with Kei Nishikori as both prepare for their first grand slam finals.
Monday's final will mark the first time since the 2005 Australian Open that a grand slam decider will be contested without either Federer, Rafael Nadal or Novak Djokovic.
With a bigger and more consistent serve, Cilic was simply too good for the Swiss second seed – who hit 28 winners and 17 unforced errors in a solid showing.
Cilic completed his victory in style, serving three aces before powering a backhand down-the-line winner as he held to love.
The 25-year-old said it was the best performance of his career.
"It's an amazing day for me. I feel amazing," Cilic said.
"I think it was the best performance ever in my career. I'm extremely happy to be in my first grand slam final."
Such was Cilic's dominance, he made Federer look desperate and short of ideas throughout the one hour 45 minutes.
Federer chipped and charged often and Cilic passed him at will.
For a brief moment in the third set, Federer looked capable of producing yet another comeback.
Having come from two sets to love down to beat Frenchman Gael Monfils in the quarter-finals, Federer broke for a 2-0 lead in the third.
Cilic replied immediately before breaking in the seventh game, and he showed no signs of nerves in closing out the encounter.