Hawke's Bay were dealt an early blow when winger Caleb Makene was forced from the field in the 15th minute after a head clash with flanker Marino Mikaele-Tu'u.
That left the hosts with one back reserve, outside back Jonah Lowe, who hadn't played for the previous eight weeks.
The Magpies opened their account with a superb solo try to centre Neria Fomai in the 17th minute. Tiaan Falcon converted.
Otago extended their lead in the 26th minute when Collins scored his second try after a loose carry from Magpies winger Mason Emerson under pressure. All Blacks second five Ioane maintained his 100 per cent success rate at goal with his conversion.
The hosts had to score next and they did in the 32nd minute with a try to loosehead prop Pouri Rakete-Stones after good work from halfback Folau Fakatava. Falcon converted.
Otago took a 24-14 lead into the interval after Ioane kicked a 35 metres penalty after Magpies prop Ben May was ruled offside by Auckland referee Angus Mabey.
Otago had first use of a good breeze and their overall game in the first spell was far more accurate than the Magpies who only had 39 per cent of the territory but 58 per cent of possession.
Hawke's Bay opened the scoring in the second half with a 43rd minute penalty to Falcon from the same spot Ioane kicked his from. The hosts were unlucky not to concede a try when Otago were ruled to have knocked the ball on in the 52nd minute before McDowall had dived over.
The Magpies tied the score at 24-all when halfback Folau Fakatava took a quick tap when they were awarded a penalty in the 54th minute. He kicked ahead and his first five-eighth Lincoln McClutchie won the chase for the ball. Falcon converted to maintain his 100 per cent success rate.
Six minutes later substitute loosie Devan Flanders scored for the Bay after good work from Emerson and Fakatava. Falcon converted from out wide.
Otago equalised when, five minutes later, centre Aleki Morris-Lome scored after a counter attack and Ioane converted.
Flanders made a crucial try-saving tackle on Otago winger Jona Nareki in the 68th minute. The Magpies did well with their territorial play during the final five minutes but were guilty of opting for too much phase play when a dropped goal would have been the better option.
But with extra time to come the hosts were still in the hunt.
Otago grabbed an early advantage with a 50 metre penalty from Ioane in the 82nd minute.
Five minutes later Emerson used his outstanding pace to score off a good pass from Flanders into the wind. Falcon converted and the Magpies went into the final 10 minutes with a four point lead.
A Falcon penalty from 30 metres out had the hosts ahead 41-34 in the 91st minute. But Otago weren't done.
Substitute loosie Mika Mafi scored in the 94th minute to have the visitors trailing by two. But a Falcon penalty in the 98th minute gave the Magpies the victory and a berth in the final.
Match highlights
Heartstopper: When Magpies winger Caleb Makene was knocked out in a head clash in the 15th minute. When he was replaced by Ollie Sapsford the Magpies were already down to one back reserve in Jonah Lowe after opting for a six-two split on the bench.
Turning point: When referee Angus Mabey blew the final whistle after 100 minutes of thrilling rugby.
Player of the match: Magpies fullback Tiaan Falcon. Eight successes from as many attempts at goal including several crucial ones.
Scorers:
Hawke's Bay 44 (Neria Fomai, Pouri Rakete-Stones, Lincoln McClutchie, Devan Flanders, Mason Emerson tries; Tiaan Falcon 5 cons, 3 pens ), Otago 39 (Michael Collins 2, Slade McDowall, Aleki Morris-Lome tries; Josh Ioane 4 cons, 2 pens ). HT: Otago 24-14.
