New Zealand, a four-time world champion, were trailing 0-10 at the end of the first half at Yokohama's International Stadium.
The All Blacks, who were one of the main contenders to take the throne once again, failed to rally after the intermission, Efe news reported.
Against the odds, England made the final for the fourth time in the hunt for a second title, after its successful campaign in 2003.
They lost the 1991 and 2007 finals to Australia and South Africa, respectively.
In the final on November 2, England will take on the winners of the second semifinal between Wales and South Africa.
England dominated the first half thanks to their efficiency in all phases of the game, preventing New Zealand, regarded as one the best rugby teams in history, from hitting their stride.
It took England less than two minutes to get on the scoreboard with a try from Manu Tuilagi, who became the tournament's top scorer with six tries, and a conversion by Owen Farrell, who made the score 7-0.
The All Blacks tried to regroup and dominate the ball, but they made several mistakes amid the high pace set by England, who nearly increased its tally shortly before the half-hour mark, but its effort was ruled out for obstruction.
This seemed to momentarily revive New Zealand, who tried to get their first points down the left wing but the effort went in vain.
A penalty from George Ford at the end of the first half made the score 10-0.
This was only the second time that New Zealand have failed to score during the first half of a World Cup clash.
After the intermission, England picked up where they left off and managed to increase the score to 13-0 in the 50th minute from a penalty.
Despite suffocating pressure by England, New Zealand finally got onto the scoreboard in the 57th minute with a try by Ardie Savea followed by a conversion from Richie Mo'unga to make 7-13.
But England continued with their game plan, resulting in two penalties which were successfully converted by Ford in the 63rd and 69th minute to increase his team's lead to 19-7.
England even had a chance to increase the tally, but Ford missed a last gasp penalty.
The final whistle sparked celebrations among the English fans at the nearly-packed Yokohama stadium.
It was only England's eighth victory over New Zealand in 42 encounters.
( With inputs from IANS )