A calmly-taken penalty from Jim McIntyre with just three minutes left sent Dunfermline into the Scottish Cup final against Celtic and sealed a UEFA Cup place.
Chris Hogg made a rash challenge on Adam Hammill in the area and referee Craig Thomson had no hesitation giving the spot-kick.
It was a harsh conclusion for Hibs, who had dominated for long spells but had passed up a string of chances.
Hibs took the game to Dunfermline from the kick-off and in the opening few seconds Abdessalam Benjelloun tested Dorus de Vries from outside the area.
A mistake by Sol Bamba led to Benjelloun setting up Damon Gray but the teenage striker dallied and Greg Shields made a great saving tackle.
But Dunfermline hit back. Andy McNeil did well to divert a Hammill shot past his post.
There was an amazing let-off for Hibs after 17 minutes. McNeil did well to block a close-range header from McIntyre from a Jim O'Brien corner before Phil McGuire's follow-up effort was headed off the line by Lewis Stevenson.
It was a terrific contest with neither side holding back.
Scott Brown conjured up a chance for himself with a great run into the box to flick the ball over de Vries but Shields hooked the ball off the line.
Stevenson then saw a long-range effort flipped over the crossbar by de Vries as Hibs pressed.
Benjelloun was inches away with a 20-yard chip six minutes from the break, before Steven Whittaker sliced a shot wide after superb work by Brown.
The second half was also open with Rob Jones just a yard wide with a 59th minute header from a David Murphy corner and then substitute Steven Fletcher was inches too high with a header.
De Vries saved at the feet of Brown after 76 minutes as Dunfermline lived dangerously in the closing stages.
The goalkeeper saved a point-blank effort from Brown with eight minutes left from another Murphy corner.
But Dunfermline stole it at the end when McIntyre kept a cool head at the death.