Saudi Arabia finished third in the group standings, scoring their only goals of the tournament and vastly improving from the 5-0 thrashing by hosts Russian Federation in their opening game.
Mohamed Salah scored his second goal for the nation during the first half after there was doubts he would even start the final Group A clash.
After the Saudis had sloppily given possession away, Pharoahs talisman Salah made his way in between both centre-backs to latch onto a searching long pass, taking the ball down with a lovely trap before lofting a shot over the onrushing Yaseer Al-Mosailem.
Moments later, Salah should have doubled his tally after being played through on goal for a second time but the forward tried to be too clever and flicked the ball well wide of the far post.
Igor Smolnikov was sent off for two quick bookings, the second a bad tackle on Laxlat in the 36th minute.
Five minutes before the break, the Saudi's were awarded a fairly soft penalty when Yasser Al-Shahrami's cross plinked off the arm of Egyptian defender Fathy.
However, glory can not be taken away from the Egyptian goalkeeper who made the record of being the oldest player to play in the FIFA World Cup and he had some major highlights while saving an incredible penalty.
El Hadaray did not finish victorious, however, as Salman Alfaraj - with another penalty - levelled Mohamed Salah's opener and Salem Aldawsari struck an injury-time victor.More news: Argentina midfielder Javier Mascherano shoots down Jorge Sampaoli rift rumours
It was a fantastic save from El Hadary, who at the age of 45, makes his finals debut in Volgograd.
No mistakes by Al-Faraj from 12 yards out.
Egypt were left to hit on the counter but almost did so to good effect in the 84th minute; Kahraba being allowed to race through unopposed but his powerful drive was beaten to safety by Al-Mosailem.
Saudi Arabia played their best match of the tournament, showing quality football virtually throughout the entire 90 minutes.
Al-Dawsari snatches a famous win for the Green Falcons.
They then pulled off a win in the 95th minute thanks to Salem Al-Dawsari's angled shot.