Liverpool reached their first Wembley final for six years as a double from "world-class striker" Diogo Jota set up a Wembley date with Chelsea in the Carabao Cup.
Jota brilliantly filled the gaps left by Mohamed Salah and Sadio Mane - away at the Africa Cup of Nations - as his lethal finishing wrecked Arsenal's trophy hopes for this season after a goalless semi-final first leg at Anfield.
Arsenal started impressively, Alexandre Lacazette hitting the woodwork from a free-kick, but Liverpool struck after 19 minutes when Jota's scuffed shot after a fine run beat scrambling Arsenal keeper Aaron Ramsdale.
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Lacazette missed Arsenal's best chance after the break, shooting over when clean through, but Liverpool had chances of their own and sealed their first final in this competition since the 2016 loss to Manchester City when Jota ran on to Trent Alexander-Arnold's pass and lofted a precise finish over Ramsdale with 13 minutes left, the goal given by VAR after initially being disallowed for offside.
Reds boss Jurgen Klopp said: "We scored two wonderful goals - Diogo Jota was on fire. We were completely convinced when he arrived at the club he would help us massively.
"Since he is here he has made another step, he has turned into a really world-class striker."
Arsenal's misery was complete when Thomas Partey, on as a substitute after returning from Afcon at midday, received a second yellow card for a senseless late challenge on Fabinho.