World No.11 India will now play arch-rival Pakistan, world No.9, for the bonze medal while Australia will go for a record five consecutive Champions Trophy titles. Australia will face the Netherlands in Sunday's final.
Under sunny skies and in front of a full house, the Kookaburras, ranked second, dominated the Indians with a speedy, relentless attack.
Both India and Australia were on a mission. The Aussies were looking to re-establish themselves as the unbeatable team in men's hockey after missing out the Olympic gold medal, while the Indians were looking to re-establish their national team programme on the eve of the launch of the Hockey India League.
But the Indians were not match for the Australians.
Star forward Jamie Dwyer made the difference in the game. He struck twice in a 10-minute span in the first half to lift the Aussies to the early 2-0 lead. Dwyer popped in a rebound on a Chris Ciriello penalty corner flick and then easily converted a penalty stroke mid-half to send a clear message early on.
Kieran Govers extended the lead as he swept in front the India net and converted the streaking shot to give Australia a solid 3-0 lead with 26 minutes left in the game.
The Aussies continued to apply steady pressure as India never really had a chance to work its way into the game and threaten the hosts' solid lead. It was a valiant effort on both sides, but in the end Australia was the better team.
India still has the chance to earn a major moral victory for the national team programme as it can go for its second-ever Champions Trophy medal and its first since 1982 in the bronze medal game against Pakistan. That game is sure to be barn burner as the rivals always put on an entertaining show.
Former Australian players Nathan Burgers, Luke Doerner and Grant Schubert were recognised before the game for their outstanding careers with the Kookaburras.
Earlier in the day, the Netherlands earned its first spot in a Champions Trophy final game since 2006 after they topped Pakistan 5-1 in first semi-final game. The victory guarantees the Netherlands their third consecutive medal at the Champions Trophy.
The Dutch wasted no time getting onto the board when Billy Bakker went-end-to-end just 1.30 into the game to give his team the quick advantage. The lead doubled when the swam of orange jerseys was camped in the Pakistan D as Seve van Ass took advantage of the situation and made it 2-0 with 15 left in the half.
Pakistan scored three minutes later on what was officially an own goal from the Netherlands, but given enough time, Shakeel Abassi might have put in the marker himself on the play.
Bakker netted a second goal with three minutes left in the half on a solo effort from the top of the circle to give the Netherlands some breathing room at the break with a two-goal advantage.
The second half was big on action, but short on goals. Valetnin Verga, who left early in the first half after a collision, returned in grand style to sink the 4-1 goal 10 minutes into the half. From there, the Dutch knew they had things well in hand and even replaced goalie Jaap Stockmann with back-up Pirmin Blaak. Late goals on each side brought the final score to 5-2.
The Dutch will go for their ninth Champions Trophy gold medal and their 22nd overall. The last time the Netherlands won the gold medal at the Champions Trophy was 2006, which was also their last appearance in the final game.
For Pakistan, the loss still has a silver lining as they can go for their first medal at a Champions Trophy since 2004.
Mumbai Indians won the toss and decided to bat against Sunrisers Hyderabad in their Indian Premier League match here Wednesday.