Elise Thorsnes opened the scoring for 1995 winner Norway after 56 minutes but a minute later Simon grabbed the equaliser.
The 20-year-old Sydney FC forward then sealed victory with a header three minutes from time.
"There was a lot of courage and commitment shown out there," said Australia coach Tom Sermanni, whose side had needed a draw to advance to the last eight for the second consecutive World Cup.
"I was very deflated when they scored the first goal, but it was critical that we scored straight afterwards.
"We knew it would be difficult. Norway have a really robust style of play, but we rearranged the formation (after half-time) to give us a bit more balance and the game opened up a bit."
Simon added: "It was great to get two in the one game. It's been a long time coming and it's great for my confidence.
"Going into such a crucial game, we knew we needed a draw or a win. We wanted a win. The girls fought hard and when it was one-all, we knew we needed that extra goal."
The Matildas go through to the last eight with already-qualified Brazil from Group D and they next play Sweden, which beat the United States 2-1 in Wolfsburg to finish top of Group C for a place in the semi-final.
Former heavyweight Norway has failed to get to the quarter-finals for the first time after suffering its first loss to Asian champion Australia in five meetings.
"It all went wrong. The disappointment is incredible. We really had hoped we could make it much further than we have," coach Eli Landsem said.
"But we'll be back."
Back in the line-up
Simon was back in the Australian line-up after being rested against Equatorial Guinea, along with 16-year-old striker Caitlin Foord and goalkeeper Melissa Barbieri.
Clare Polkinghorne got her first full start with Emily Van Egmond starting on the bench after playing the first two games.
Both sides failed to make an impact in a lacklustre first half, with Norwegian striker Cecilie Pedersen's first effort on 15 minutes going over the bar.
Thorsnes pushed forward with two efforts on 33 and 37 minutes that were both held by Barbieri.
Lisa De Vanna had Australia's best shot of the first half on 40 minutes but Ingrid Hjelmseth held firm in the Norwegian goal.
The breakthrough came after 56 minutes when an error in the Australian defence resulted in Barbieri rushing out to retrieve the ball, only for Thorsnes to race forward and slam into an unguarded goal.
Not to be outdone, the Matildas hit back straight away, racing towards the Norwegian goal with De Vanna crossing to Simon, who coolly tapped into the net for the equaliser.
Simon missed the chance for a double after 70 minutes when she hit just wide, while a Trine Ronning header for Norway hit the netting six minutes later.
A free-kick from defender Ronning six minutes from time came dangerously close but bounced off the post.
But Simon put the result beyond doubt three minutes from time when she picked up another cross to head into the goal.
The result was a double blow for the Norwegians, the 2000 Olympic champions, who not only miss the quarter-finals for the first time but are now out of the running for the 2012 London Games.
The Brazilians meanwhile topped the group with a convincing 3-0 victory over Equatorial Guinea to set up a mouth-watering quarter-final match against the US in Dresden.
Erika struck in the 49th minute and Cristiane doubled the advantage at the 54-minute mark before completing a brace with a penalty in injury time.
Brazil finished Group D with a perfect nine points and a goal difference of 7-0 as it booked its place in the quarter-finals in ominous fashion.
In the day's other Group C encounter, North Korea was held to a goalless draw by debutant Colombia.
The 31st-ranked South Americans achieved their first World Cup points in a tie where nothing was at stake but pride for the already eliminated sides, who were playing each other for the first time.
-AFP
Tags: sport, football, australia, germany, norway First posted July 7, 2011 06:16:00
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