Yun Hyon Hi converted a 78th-minute penalty for the winner, which finished the Koreans atop Group C with nine points and sent it to a Friday quarterfinal against the United States.
Canada finished in third place with three points, three behind second-place Norway, which defeated Argentina 4-1 in a match played simultaneously in Miyagi.
Christine Exeter gave Canada the lead in the 12th minute, running diagonally onto a rolling ball from Vanessa Legault Cordisco, pivoting right 360 degrees to elude defender Pong Son Hwa and finishing from the middle of the area.
Kim Un Hwa equalized in the 33rd minute, running unchallenged down the center of the field, touching to the right at the 18 an shooting into the opposite side of the net for her seventh goal in three matches.
Yun scored the winner after Canadian defender Rachel Melhado was called for tripping Yun as she cut inside on the left side of the penalty area.
Outshot 17-4 in the match, Canada will return to the 2014 U-20 Women's World Cup when it hosts the tournament as a prelude to staging the 2015 Women's World Cup.