Manotas brace helps Dynamo see off Union for first US Open Cup trophy
Houston also earned a cash prize of US$300,000 and punched their ticket to the 2019 CONCACAF Champions League.
"It feels good, definitely," said head coach Wilmer Cabrera, a former player for the Colombian national team. "This is a big step for us.
"We needed to be disciplined, organized and play to our strengths. Couldn't be better for us."
Manotas, who claimed Golden Boot honours, dropped to his knees to head home the game's opener in the fourth minute in front of a crowd of 16,000 at BBVA Compass Stadium.
"He has an unbelievable talent and he is going to continue to grow in this game," Cabrera said of Manotas.
He struck again in the 25th minute with a fine solo effort highlighted by a superb left footed drive that bounced off the hand of the Union keeper, hit the inside of the post, and into the lower left corner of the net.
Manotas finished with a tournament-leading six goals and stretched his overall 2018 scoring total to 20 goals.
"This is the reward for all the hard work the players have put in. We want to honour the city and the fans. It is an opportunity for us to bring pride and happiness to the city," said Cabrera.
The Union are now 0-3 having reached the final three times in the last five years.
Any hopes of a late second half rally on Wednesday were quashed by an own goal from Union centre back Auston Trusty.
The two teams met once in MLS league play this year, with the Union winning 3-1 at home on July 25. Manotas also scored the opener in that one in the 10th minute.
After defeats in their previous two trips to the USOC semi-finals, Philadelphia advanced on penalty kicks over LAFC, winning a shootout after the sides played to a 3-3 draw.
The Union reached the final by defeating the Chicago Fire 3-0.