The Croatian team won the match after two extra time periods, with Zeljko Musa scoring the goal that took the team to the final five seconds before the end of the match.
On Sunday, Croatia will play the winner of the second semifinal, the contenders being Spain and Slovenia.
Croatia has so far won five medals at European handball championships - two silvers, in 2008 and 2010, and three bronzes, in 1994, 2012 and 2016.