Western entered the game down 3-0 from the semi-final first-leg and when City captain Aziz Behich scored in the 20th minute in front of 7691 fans at AAMI Park on Saturday, it sealed progression and teed up a blockbuster decider.
Noah Botic scored in the 66th minute to give United faint hope before City saw out the game to draw 1-1 and win 4-1 on aggregrate.
"It's a massive game, obviously, not just because it's a grand final, but it's a derby which will add always a little bit of extra spice," City coach Aurelio Vidmar said.
"It feels like it's already building up straight away. I think it's what everyone is talking about straight after the game. So it's worked out well."
Earlier on Saturday, City players watched on as the Victory claimed a stunning 2-0 away win over Auckland FC to beat the premiers 2-1 on aggregate.
Incredibly, what should be a sell-out grand final will be the only major men's sporting event in town next Saturday night, with no AFL games in Melbourne.
While City will chase their second championship in five years, and Victory will hunt for their first since 2017-18, United are at the crossroads after a week overshadowed by their player payments scandal.
The players' union on Tuesday issued United with breach notices over unpaid wages and superannuation for both men's and women's clubs.
It's understood outstanding salaries have been paid but some superannuation has not.
Coach John Aloisi is off-contract, while star striker Botic appears destined to try his luck overseas.
City scored after Tilio burst forward and worked the ball to Yonatan Cohen, who forced a terrific dive from Matt Sutton.
Unfortunately for the United goalkeeper, Behich had made a good run to the back post and was on hand to tap home.
Western were inches away from scoring in the 42nd minute.
Riku Danzaki smacked a fierce strike off the post, then Beach brilliantly parried Botic's follow-up before claiming Michael Ruhs' subsequent header.
City peppered United's goal without reward.
"We had some really, really good chances in that first half, probably could have buried it a little bit earlier," Vidmar said.
"But at the end, it's about getting over the line in finals, and that's what we did."
United scored after Botic won the ball off Steven Ugarkovic and it spilled to Hiroshi Ibusuki.
He found Matt Grimaldi, who squared it for Botic to tap home.
But it proved too little too late.
"We were just second-best tonight," Aloisi said.
"I thought they were the better team, but the boys didn't stop trying, didn't give up."
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