It was the Bula Boys who struck first courtesy of a 12th minute finish from Tevita Waranaivalu, but the midfielder went from hero to zero when he was sent off half an hour later for a dangerous tackle.
Then in first half stoppage time, Hekari United forward Ati Kepo scored to level the match at 1-1, which would have been enough for PNG to progress thanks to a superior goal difference.
Star striker Tommy Semmy put the result beyond doubt with a sharp finish in the 63rd minute to set up a semi-final showdown against Group A winners Solomon Islands.
In the early match, a hat-trick from teenage prodigy Raphael Lea’i inspired Solomon Islands to a 3-1 victory over Tahiti.
The 18-year-old Henderson Eels forward opened the scoring in the 20th minute before Alvin Tehau drew Tahiti level at 1-1 six minutes later.
Lea’i put the Bonitos back in front seven minutes into the second half before completing his hat-trick deep into stoppage time.
The Melanesian side had opened the tournament with a 2-0 win over the Cook Islands last week, but the result was voided after Vanuatu and then the Cooks were forced to withdraw from the tournament following an outbreak of Covid-19.
Meanwhile, the All Whites confirmed top spot in Group B with a comprehensive 7-1 victory over New Caledonia to set up a semi-final clash with Tahiti.
St Mirren striker Alex Grieve and Newcastle United frontman Chris Wood both scored twice for New Zealand, with Logan Rogerson, Andre de Jong and Bill Tuiloma also on the scoresheet.
The eventual OFC winners will play-off against the fourth-placed team from the CONCACAF confederation for a berth at the FIFA World Cup Finals.