2018 gold medallists Sweden will face Switzerland in the final on Sunday, while Canada will take on United States for bronze on Saturday, after the Swiss prevailed 7-4 in the other semi-final.
Canada finished in fourth place in the Round Robin, but an 8-6 win over Sweden in that stage of the competition would have given them belief against the side who finished top of the table.
However, they were fortunate not to be two down after the first end, as Anna Hasselborg could only raise the stone lying one into the centre, rather than take a second with the hammer. A wick through a congested rink from Rachel Homan allowed Canada to draw level after two ends.
A simple take-out from Hasselborg allowed Sweden to re-take the lead, before a well-placed draw in the fourth end tied things up once more. The contest remained on a knife-edge at the halfway mark, as Sweden blanked the fifth end to retain the hammer.
That turned out to be a good call by the Swedes, as a couple of missed take-outs from Canada allowed Sweden a take-out of their own with the final stone to score two, going 4-2 ahead with four ends to play.
High-quality shots from Sara McManus put the Canadians under pressure in the seventh, before Hasselborg added an extra guard with their last stone to protect the lying one they had in the house.
That forced Homan into a tough promotion take-out, but she failed to find the angle, and Sweden stole another point.
Canada could only take one back in the eighth after an ambitious promotion take-out took out Sweden's lying one, but the Canadian stone failed to pull up inside the house, meaning the chance to take two had gone.
No mistake from Hasselborg with a double take-out in the ninth extended the Swedish lead back to three ahead of the final end, but a pair of weak Canadian draws left Sweden lying four with two red stones left.
Homan successfully removed two, but Hasselborg immediately removed Canada's one to end the North Americans' challenge, and earn Sweden a 6-3 victory.
It's now three Olympics in a row with medals for Sweden in this event, after they followed 2018 gold up with 2022 bronze.
Canada will fight the USA for bronze, as they look to secure their first Olympic medals in the women's competition since gold in 2014.