It took 20 minutes of extra time to decide this tie at Dungarvan before University of Limerick ground out a three-point win.
Patrick Hurney missed a penalty for Waterford in the seventh minute, but David Moran was spot on with his effort on 17 minutes for UL.
UL faced mounting Waterford pressure in the second half after leading 1-6 to 0-3 at half-time.
Waterford were in front for the first time the 54th minute when Liam O'Lionain crashed home a spectacular goal. UL hit two quick points before Gary Hurney forced extra time with an equalising point from a free in the final seconds.
In extra-time, the students were by far the stronger and a Gary Brennan point from play and two from frees by Fiachra Lynch sealed their deserved win.
Scorers -- UL: D Moran 1-3, F Lynch 0-6, B Moran 0-3, P Byrne, C Keane, G Brennan 0-1 each. Waterford: L O'Lionain 1-5, G Hurney 0-4, L Lawlor 1-0.
UL -- D Dineen; C O'Mahoney, S Twomey, R Brady; P Carroll, A O'Sullivan, K Harrington; D Moran, G Brennan; F Lynch, C Keane, P Byrne; C McGowan, B Moran, D Bracken. Subs: P Larkin for McGowan, D Geaney for Larkin, D Murphy for Bracken.
Waterford -- T Wall; E Rockett, J Seward, S Lannon; J Phelan, PJ Dunphy, M O'Gorman; M Ahearne, C O'Keeffe; T Grey, G Power, D Casey; G Hurney, L O'Lionain, P Hurney. Subs: L Lawlor for P Hurney, M Kiely for O'Keeffe, J Walsh for Lannon, P Power for Casey.
REF: Brian Tyrell, Tipperary.