A late first-half goal from Quinn Saunders helped St Peter's into a 1-8 to 0-5 interval lead at Inniskeen.
The Derry school were boosted by an early second-half goal by Kevin Small but Rory O'Connor netted to make it 2-9 to 1-6 to St Peter's after 40 minutes.
A late rally by St Mary's yielded 1-3 without reply, Cormac Murphy scoring the goal, but it was not enough.
The Wexford school, who will contest the Hogan decider for the first time in their history, led by seven points, 2-10 to 1-6, with eight minutes remaining.
They will take on reigning champions St Brendan's of Killarney in the final on Saturday 1 April.
St Peter's were last in action in late January when they ended a 25-year wait for a Leinster senior crown, while St Mary's claimed their first MacRory Cup title by defeating 19-times winners St Colman's Newry on St Patrick's Day.
The semi-final was switched from Drogheda to the Monaghan venue.
St Mary's Magherafelt lost 2-10 to 2-9 to St Peter's Wexford in the semi-finals of the Hogan Cup on Wednesday.