Der Dino knew coming into the game that they needed to win the game to ensure yet another season in the Bundesliga but things didn't start well for them as Robin Knoche headed the Wolves into the lead.
Filip Kostic though levelled proceedings nine minutes later after latching onto a brilliant through ball from Lewis Holtby to give them real hope going into the second half.
Just as it looked like they weren't going to get a winner though, Waldschmidt, who only came onto the pitch two minutes earlier, headed home a brilliant Kostic cross to send the home fans inside the Volksparkstadion into delight as they ensured their safety yet again.
A cagey start to the game was ended with the visitors taking the lead
As expected, in such a crucial match, the game started off with both sides not going forward quickly until the Wolves created the first decent chance of the game and from their they took control of the game.
The Wolves were denied a opener when Mario Gomez's brilliant control and shot in the box was going into the bottom corner of the net but Christian Mathenia made a fantastic save to keep his side on level terms.
The visitors kept up their pressure and Jakub Błaszczykowski forced Mathenia into another very good save from outside the box.
A minute or so later though they did finally get a goal that their play deserved as Knoche powered home a header into the top corner of the net from a Gomez cross.
Kostic levelled for the hosts with their first attack
It seemed to be the wake up call that the home side needed though as they then started to play some football and from their first attack in the game, they managed to get a crucial equaliser in the game.
Kostic was the man for the hosts as he finished past Koen Casteels after Holtby played him through on goal after a bad mistake from Philipp Wollscheid in the Wolves defence.
It was just what the home side needed as they started to get a foothold in the game for the remainder of the half but they could have went behind again with the last kick off the first half when Yunus Malli was played in on goal but he put his shot just wide of the goal.
But as it was the hosts managed to get to half-time knowing that they would now need to go on and win the game in the second half if they were going to avoid a relegation play-off.
Both sides cancelled each other out at the beginning of the second half
This was noticeable at the start of the second half as they pushed forward from kick-off looking to get the crucial goal but their final ball was relly letting them down at the crucial moment.
As the half went on, the game became a very scrappy one as there was alot of fouls from both sides which really halted the momentum of the game.
The hosts though knew that they had to push forward late on to get a winner and they almost got in when a good move ended with Bobby Wood laying the ball back to Bakery Jatta, who had just came on as a second half substitute, but the midfielder blazed his shot well over the bar when he should have done much better.
Waldschmidt's late winner ensured the hosts remained in the Bundesliga while condemning the visitors to a playoff match
It didn't prove to be a costly miss though as with two minutes of normal time left, Waldschmidt, on as a second half substitute, rose high in the box to power a Kostic cross into the back of the net to send the home fans and players into wild celebrations.
These celebrations though were almost halted when a long ball forward from Casteels found Maximillion Arnold in the box at the other end but he saw his goalbound shot saved by the impressive Mathenia, who ensured that the game ended with his side ensuring safety for next season.
On the other hand, the defeat means that the Wolves will have to play in a relegation play-off match to see whether they will remain in the top division next season.