Donegal sprang a surprise by beating Derry 1-11 to 0-10 in Saturday's first semi-final in the Cadbury's Ulster Under-21 Football semi-finals.
Donegal played the entire second half with only 14 men after Peter McGee was red-carded in the 28th minute.
Donegal led by 1-5 to 0-3 at half-time, with Michael Murphy scoring the Donegal goal midway through the half.
Cavan beat Monaghan by one point, 1-10 to 1-9, in the second semi-final and will play Donegal on Wednesday night.
Cavan led 1-5 to 0-0 early in the game, with Conor McClarey scoring a goal after just two minutes.
Monaghan then scored five points without reply to trail by three points at the interval.
Monaghan reduced their deficit to just a point and then David Millar scored a goal after 18 minutes of the second half.
Three late Cavan points secured victory at Brewster Park.