Priest replied with another penalty to narrow the gap to 22-21 with seven minutes left, but Merrett closed the match out with a late goal.
Kieran Coll, Don Lolo, Frank Havea were the try-scorers for the top qualifier.
South Canterbury holding on was the only victory by the home team in all four Heartland Championship playoffs.
In Levin, North Otago put down a very disappointed Horowhenua Kapiti who had gone off the rails in the last few weeks of the competition, hammering them 57-12 in the Lochore Cup semifinal. The match was virtually over at half-time with the southern team up 33-5.
Sala Halaleva grabbed a hat-trick, while Oscar Pamment picked up a double as their team scored nine tries for their most impressive win of the season.
It meant Te Kuiti became the unlikely venue for the Lochore Cup final as King Country have gone one game better than last year after they beat Buller 20-6 in the other playoff in Westport.
The visitors scored a try in each half through Anthony Wise and James Hemara, taking the key 17-0 advantage in the 48th minute.
Buller chipped away at the deficit with Hagen Schulte and Andrew Stephens adding penalties, but King Country had the final say with a late penalty.
All semifinals were North Island v South Island affairs and that theme will continue in the Meads and Lochore Cup finals on Saturday.
Results, semifinals.
Meads Cup:
Wanganui 26 (Samu Kubunavanua, Simon Dibben tries; Trinity Spooner-Neera 4 pen, 2 con) Mid Canterbury 11 (Jon Dampney try; Andrew Letham 2 pen). HT: 12-3.
South Canterbury 25 (Kieran Coll, Don Lolo, Frank Havea tries; Jason Merrett 2 pen; Jared Trevathan 2 con) Wairarapa Bush 21 (Tim Priest, Paul Tikomainavalu tries; Priest 3 pen, con). HT: 18-7 Wairarapa Bush.
Lochore Cup:
North Otago 57 (Sala Halaleva 3, Oscar Pamment 2, Lemi Masoe, Aleki Morris, Maene Mapusaga, Cameron tries; Ben Palmer 6 con) Horowhenua Kapiti 12 (Haamea Ahio, David McErlean tries; Brandyn Laursen con) HT: 33-5.
King Country 20 (Anthony Wise, James Hemara tries; Zayn Tipping pen, 2 con, Hemara pen) Buller 6 (Hagen Schulte pen, Andrew Stephens pen) HT: 10-0.
Finals draw:
Meads Cup: South Canterbury v Wanganui, Timaru.
Lochore Cup: King Country v North Otago, Te Kuiti.