Tendulkar, one of the game's all-time greats, studded his 19th one-day hundred with 13 boundaries and three sixes to lift India to 307-8 after they were given first strike.
The 25-year-old set up India's win by removing Australia's two most accomplished one-day batsmen, skipper Steve Waugh and Michael Bevan, with his stready leg-spin.
Australia never recovered from the blow and were shot out for 263 before a packed house of 40,000 at the National stadium here.
Tendulkar deceived Steve Waugh in the air for an easy return catch and then bowled Bevan with one that moved away from the left-hander, finishing with 4-38 and the man of the match award.
India take on the winners of Thursday's quarter-final between Pakistan and the West Indies in Saturday's semi-final of the knock-out tournament featuring the nine Test-playing nations.
Australia, who finished a three-Test series in Pakistan two days earlier, return to Karachi to prepare for three one-day internationals against Aamer Sohail's men next week.
India's emphatic victory was the first by a team bowling second in the last eight matches at the National stadium.
Tendulkar, who surpassed West Indian Desmond Haynes' record of 17 one-day centuries last month, was simply unstoppable against his favorite enemy.
His third successive century in official one-dayers against Waugh's Australia -- he made 143 and 134 in the Sharjah Cup in April -- could not have been better timed.
India, sent in to bat in good batting conditions, made a disastrous start when prolific opener Saurav Ganguly fell in the second over and skipper Mohammad Azharuddin lasted just three balls in his 300th one-day appearance.
Rahul Dravid, who came at 8-2 in the third over, helped Tendulkar retrieve the situation with a 138-run partnership for the third wicket.
The dour Dravid, omitted from the one-day side for a year until his recall last month, made 48 off 80 balls when he ran himself out attempting a cheeky single in front of Gilchrist.
Vice-captain Ajay Jadeja continued the run hunt with an attractive 71 off 65 balls, adding 132 for the fourth wicket with Tendulkar.
The Indians, who were 280-3 with five overs still remaining, managed just 27 runs more as the gritty Australians captured five quick wickets.
India, who took the field wearing black bands in memory of former Indian cricket board secretary Ghulam Ahmed who died in Hyderabad earlier on Wednesday, received an early fright.
Openers Mark Waugh and Adam Gilchrist gave Australia a flying start, putting on a run-a-ball stand of 51 before Gilchrist was bowled by Javagal Srinath for 25.
Mark Waugh and Ricky Ponting added 94 for the second wicket to lift Australia to a promising 145-1 by the 26th over, when India hit back with three wickets in the space of 27 runs.
Left-arm spinner Sunil Joshi bowled Ponting for 41 and then struck a vital blow in his next over by having Mark Waugh caught behind for 74.
Australia's move to promote tailender Brendon Julian as pinch-hitter backfired when he was bowled by Srinath after making 20 off 16 balls.
Tendulkar, brought in as the sixth bowler by Azharuddin, took
over at that stage to slice through the Australian middle-order in
dramatic fashion.
Date-stamped : 28 Oct1998 - 18:26