Switzerland will play for the first gold medal in that country's history. Sweden wants to be the first host country to win a world title since 1986.
The Swiss extended their unbeaten run at this year's men's world hockey championship to nine wins with a 3-0 victory over the United States in one semifinal Saturday night. The Swedes downed Finland 3-0 in the afternoon semifinal.
"To get this far at the world tournament is pretty special for our country right now," said Swiss coach Sean Simpson, a Canadian from Brampton, Ont.
"It's quite a thrill for our team, for our country, to be in the final in Stockholm against Sweden. It's quite a big deal."
The Soviet Union was the last country to win a world men's hockey title on home ice 27 years ago in Moscow.
"It's about time. It's about time," Swedish forward Henrik Sedin said. "No pressure, just fun.
"It's an unbelievable feeling. It's something a lot players never get a chance to be part of so it's something you dream about when you grow up."
Switzerland opened the tournament with a 3-2 upset of the Swedes, followed by a 3-2 shootout win over Canada and a 5-2 victory over the Czech Republic. The wins over what were considered the favourites in the pool gave the Swiss momentum on their run to the top in Stockholm.
Sweden finished third at 5-2 in the same pool behind Canada at (5-1-1-0). The Swedes eliminated Canada from medal contention with a 3-2 shootout quarter-final win.
Julian Walker, New York Islanders prospect Nino Niederreiter and Reto Suri, with an empty-net goal, scored for the Swiss against the Americans. Goaltender Reto Berra, a Calgary Flames prospect, stopped 29 shots for the shutout.
"I have no words for that," Berra said. "I think it's the biggest win since a long, long time for Switzerland and also I think for a lot of players it was the most important game in their life today."
Switzerland will earn their first medal in this tournament in 60 years. They won bronze in 1953.
Loui Eriksson of the Dallas Stars scored a pair of power-play goals against Finland with twin brothers Henrik and Daniel Sedin of the Vancouver Canucks assisting on both of them.
Henrik added an empty-net goal for a three-point game in front of an announced 11,674 at Globe Arena. Jhonas Enroth of the Buffalo Sabres made 30 saves for his shutout.
Simpson would not reveal whether he would go with Berra in net again Sunday or return to former NHL goalie Martin Gerber. Gerber was in net for a 2-1 quarter-final win over the Czechs.
Enroth has made game-turning saves to get the Swedes to the championship game and is expected to return to Sweden's net Sunday.
Sweden, whose last world title was in 2006, is a more confident team than the one Switzerland beat on the first day of the tournament. The addition of the Sedins after the Canucks were swept in the first round of NHL playoffs boosted Sweden's power-play.
After scoring just two power-play goals in their first seven games of the tournament, Sweden has scored four in their last two games. Daniel assisted on all four and Henrik on three.
"They know what to do," Swedish forward Gabriel Landeskog said. "They've played with each other for so long and they know exactly where to find each other and find Loui.
"They have that respect as well. Everyone knows they're world-class players. As soon as they get the puck, people will back off."
Finland and the U.S., who finished first and third in the Helsinki pool, will play for bronze Sunday.
When asked if winning a world title would erase the sting of an early NHL playoff exit, Henrik replied: "It's two different things. To lose in the playoffs, it's obviously tough. To get a chance to do something good, it's fun."
Simpson has coached the Swiss men's team internationally for three years with finishes of fifth, ninth and 11th at the men's world championship during his tenure.
He took over as head coach in 2010 for Ralph Krueger, another Canadian who had been behind Switzerland's bench for 13 years. Krueger is now the head coach of the NHL's Edmonton Oilers.
Canucks defenceman Alex Edler joined Sweden's lineup with the Sedins, but he did not play Saturday, nor will he Sunday.
Edler received a two-game suspension for his knee-on-knee contact with Canadian captain Eric Staal in Thursday's quarter-final. Edler received a major and a game misconduct.
Staal is also captain of the Carolina Hurricanes. The NHL team announced Saturday he'd suffered a third degree ligament sprain, which would not require surgery.
The team said rehabilitation should take three months and that Staal is expected to be ready for the start of the 2013-14 season.