Yanga were under pressure on the 16th minute of the pulsating match as the team's keeper Klaus Kindoki punched a dangerous free kick taken by Lipuli FC defender Haruna Shamte.
Kindoki then thwarted a header by forward Daruweshi Saliboko from close range.
The visitors went close on the 26th minute in which a header by forward Heritier Makambo, who had attempted to connect in a corner kick by midfielder Ibrahim Ajibu, went off target.
Striker Paul Nonga registered the opener for Lipuli FC two minutes later in which he slotted in from close range following the failure by Yanga defenders to foil an attack.
Saliboko made it 2-0 for Lipuli FC on the 38th minute, banging a rebound home from close range.
Kindoki had earlier cleared an effort by the forward off a free kick by defender William Lucian, Saliboko then made the most of the rebound.
Keeper Mohamed Yusuf stood firm between his posts to frustrate Yanga midfielder Papy Tshishimbi who had unleashed a fierce shot from close later in the half.
A timely clearance Yanga defender Andrew Vincent that thwarted Lucian dangerous centre from the right prevented Yanga from conceding a third.
Yanga went close on two occasions in the latter stages only to be frustrated by the agile Yusuf.
Lipuli were still 2-0 up when the opening stanza came to a climax.
Yanga threw overboard a chance to reduce the deficit on the 63rd minute as they wasted an indirect fcree kick they won thanks to a mistake by keeper Mohamed.
The visitors had earlier on gone close twice as they sought to take control of the proceedings.
They wasted a glorious opportunity to find Lipuli’s back of the net later on as right fullback Juma Abd blasted a free kick, taken from close range, way over.
The visitors kept on pushing upfront during the closing stages in an effort to reverse the score line but were frustrated by the hosts’ zealous defending.
Yanga had progressed to the last four stage of the competition with a win over Mwanza’s Alliance FC in the penalty shootout of the last eight stage.
Winning this season’s Mainland Premier League is for that matter the only opportunity for Yanga to battle it out in CAF competitions next season.
Lipuli FC will confront Azam FC in the final of this year’s ASFC, given the latter registered a 1-0 win over Kinondoni Municipal Council FC in the last four stage on Friday evening.