Morocco took the lead in the semi-finals at the Stade Velodrome in Marseille with a penalty from Soufiane Rahimi toward the end of the first half.
However, Barcelona’s Fermin Lopez leveled midway through the second period, setting up Sevilla right-back Sanchez to score the winner.
Spain is making its second consecutive appearance in the Olympic men’s football final. Three years ago in Tokyo, they had to settle for silver after losing to Brazil in extra time
Spain, looking for their second gold medal after winning in Barcelona in 1992, will face either hosts France or Egypt in the final on Friday in Paris.
Morocco still has a chance to capture its first medal by winning the bronze medal match on Thursday in Nantes.
Last year’s Under-23 Africa Cup of Nations champions had impressed on their way to the semi-finals and appeared poised to stun Spain when Rahimi scored in the 37th minute.
Morocco was awarded a penalty after a VAR review of Pablo Barrios’ foul on Amir Richardson in the area, and Rahimi stepped up to send the goalie the wrong way from the spot.
The tournament’s leading scorer scored his sixth goal of the Olympics, four of which came from the penalty spot.
That enraged the enormous Moroccan crowd, but Spain remained composed and equalised in the 66th minute through their own great player.
Lopez, a member of Spain’s winning Euro 2024 squad who scored twice in the Olympic quarterfinal against Japan, pounced on a stray ball in the area and blasted low into the net to tie the game 1-1.
With extra time looming, Spain won it in the 85th minute when Lopez found Sanchez racing into the area and sent a low shot into the far corner.
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