The umpires called off play when Hyderabad declared their innings at 236 for six, when Vanka Pratap got out for 100 when six of the mandatory overs had been bowled.
Hyderabad will now take on Mumbai in the finals to be played in Mumbai from April 19. Mumbai scored an eight-wicket win over Tamil Nadu in the other semifinal held in Mumbai.
Hyderabad had last entered the finals under the leadership of M V Narasimha Rao and won the trophy beating Delhi in 1986-87. With this victory, Hyderabad also avenged their two previous defeats in semi-final encounters at the hands of Karnataka.
Earlier, resuming at 523 for nine, Karnataka added 34 more runs in the 30 minutes of play before Dodda Ganesh was bowled by Venkatapathy Raju for 76.
A happy looking captain Azharuddin, playing his first semi-finals, paid compliments to his boys, particularly V V S Laxman, for his 353 runs. "We had decided to declare after 700 runs as the pitch was placid and we did not want to take chances against Karnataka," he said.
Azharuddin said that the match against Mumbai will be a big one for him especially, as it will be his first finals. "I had an opportunity to play in 1986-87, but I was playing for India," he said. "I will be happy if I win the tournament as it will be another feather on my cap. I have won many tournaments for the country and the state, but not Ranji".
Karnataka coach B Raghunath said that the state would have done better but for the departure of leg-spinner Anil Kumble and batsman Rahul Dravid who had left for England to play for counties there.
"They put up their best. But the dropped catches cost the match. We did put up a good fightback in the end", he pointed out.