With his side set 268 to win, Brian Lara smashed a majestic 110-ball 90 runs to see his side home with four balls to spare at the WACA.
"It was definitely one of the better wins we've had," Courtney Walsh, the West Indies captain said. "We've been chasing relatively well in the past. I thought Brian left it a bit too late to begin the onslaught."
Just when Australia looked like securing the cut-throat encounter, Lara and Robert Samuels shared a 86-run stand for the sixth wicket off just 51 balls to set up an enthralling finish.
Lara, who fashioned the West Indies' five-wicket win over Pakistan on Friday with an unbeaten 103, was unlucky to miss his third century in as many innings.
He was caught on the long-on fence off the last ball of the penultimate over bowled by Shane Warne.
The West Indies, needing 66 runs to win in the last seven overs, had Lara cut loose - taking 14 and 11 runs off Warne's next two overs, including two towering sixes off successive balls in his eighth.
Australia paid dearly for dropping Lara on 22 - Glenn McGrath spilling a relatively easy catch at extra cover off the left-arm spinner Michael Bevan. Lara scored his final 40 runs off just 24 balls and in all he hit four boundaries and three sixes.
Once again, Junior Murray, West Indies' pinch-hitting opener, set the stage with a quick-fire 56 off 67 balls and put on 60 for the first wicket with Campbell who made 15.
Lara and Shivnarine Chanderpaul (49) added 85 runs for the third wicket after which the visitors lost two quick wickets in the space off 11 balls.
Samuels, dropped down the order, scored his unbeaten 36 off 24 balls with four boundaries and a six off the medium-pacer Andy Bichel.
Both teams now have to go through the formalities of playing Pakistan - the West Indies in Sydney tomorrow and Australia in Melbourne on Thursday - in meaningless matches.
Pakistan's three wins over Australia secured them a place in the finals even if they lose the last two games and finish equal in points with the home side.
The first match in the best-of-three final between Pakistan and the West Indies is on Saturday in Sydney.
Australia has lost its last five games in the tournament and their captain, Mark Taylor, summed up his side's effort in blunt terms: "We're not playing well enough to win."
"We should have won it but a dropped catch and a couple of close lbws were turned down.
"It was disappointing at the end but the team is not playing badly. I hope this will steel us for the rest of the season."
Australia, who won the toss, built its 267 for 7 around a superb 92 from Mark Waugh but he is expected to be out of action at least for a week after tearing his left hamstring during his 125-ball innings.
Taylor put on 63 runs with Waugh for the first wicket after winning the toss, but the captain failed with the bat once again, managing just 18 runs off 55 balls.
After Waugh departed, brilliantly caught by Jimmy Adams, Bevan, Greg Blewett and Ian Healy took 97 runs off the final 10 overs to set the West Indies a big target.
n The Pakistan fast bowler Waqar Younis has recovered from a sore right shoulder and will play against the West Indies tomorrow.
*M A Taylor b Ambrose 18
M E Waugh c Adams b Chanderpaul 92
S G Law c and b Adams 14
S R Waugh c Griffith b Chanderpaul 29
T M Moody c Adams b Hooper 0
M G Bevan c Griffith b Ambrose 35
G S Blewett run out 29
I A Healy not out 16
S K Warne not out 10
Extras (lb8 nb9 w7) 24
Total (for 7, 50 overs) 267
Fall: 1-63, 2-92, 3-147, 4-148, 5-181, 6-217, 7-251.
Did not bat: A J Bichel, G D McGrath.
Bowling: Walsh 10-0-53-0 (nb3); Bishop 9-0-49-0 (nb2, w4); Ambrose 10- 0-53-2 (nb4); Adams 9-0-53-1 (w1); Hooper 8-0-35-1 (w2); Chanderpaul 4-0-16-2.
S L Campbell c Taylor b Warne 15
J Murray c Law b Bevan 56
B C Lara c Law b Warne 90
S Chanderpaul run out 49
J C Adams c S R Waugh b Moody 0
C L Hooper c McGrath b Moody 8
R G Samuels not out 36
A F G Griffith not out 0
Extras (b1 lb11 w3) 15
Total (for 6, 49.2 overs) 269
Fall: 1-60 2-80 3-165 4-168 5-179 6-265.
Did not bat: I R Bishop, C E L Ambrose, C A Walsh.
Bowling: McGrath 10-0-37-0; Bichel 7.2-0-52-0 (w1); Warne 10-1-46-2 (w1); Law 6-0-31-0; Bevan 10-0-45-1 (w1); Moody 6-0-46-2.Reuse content