Denmark, who have scored seven goals, were hotly tipped to reach the final with a gifted squad which includes Mads Laudrup, son of Michael Laudrup, former captain of the national side.
The Irish pressure told in the 23rd minute when left-winger Donal McDermott opened the scoring with a neat effort. On 61 minutes Denmark’s playmaker, Kristensen drew level but the Irish refused to buckle.
Terry Dixon came from the bench to put his side into the lead six minutes later. And Dixon wasn’t finished pouncing again in the 79th minute.
Ireland now play England in the final after they defeated Sweden 2-1, leaving them top of the group which also included Finland and the Faroe Islands.
The final takes place in Reykjavik at 3pm.
: S Redmond (Nottingham Forest); L Fitzgerald (capt - West Ham); G Donoghue (Sunderland); G Breen (Manchester City); K Byrne (Belvedere); M Daly (Cherry Orchard); K Sheridan (Belvedere); D McDermott (Manchester City); S Lawless (Cherry Orchard); C Treacy (Cherry Orchard); T Lyons (Crystal Palace).
: T Dixon (Spurs) for T Lyons (50); S Duggan (Fairview) for K Sheridan (57); M O’Toole (Tottenham Hotspur) for K Byrne (82); C Day (MK Dons) for D McDermott (82).