Terry shared an unbroken 7th wicket stand of 87 from just 78 balls with Lorcan Tucker to claim the win after the game had been delicately poised with Lightning 161 for 6 chasing 247 for victory.
Ireland's newest international struck ten fours and cleared the ropes once in his 101 ball innings, finding the perfect partner in Pembroke's Lorcan Tucker who made exactly 50 from just 47 balls (7 fours, 1 six).
Dom Joyce (28) and Stephen Doheny (26) had laid a solid foundation for the chase with an opening stand of 52, but Knights fought back with Nathan Smith (2-41) taking two quick wickets after Robert McKinley's breakthrough to make it 66 for 3.
Terry and Max Sorensen (25) added 54 for the 4th wicket, but Tyrone Kane and Eddie Richardson's dismissals in quick succession looked to have handed the initiative to the Knights - but Terry and Tucker had other ideas.
Earlier, The Knights had a 9th wicket stand of 72 in just 65 balls between top scorer Shane Getkate (87) and Jacob Mulder (31) to thank for their competitive total.
Getakte - dropped four times - made the most of those reprieves to continue his rich vein of form, striking 7 fours and 5 sixes in his 87 from 86 balls.
Nikolai Smith (33), James Shannon (30), and Greg Thompson (25) also got among the runs, but too many of the top order were guilty of poor shot selections as the Knights went from 68 for 1 to 70 for 4, and 124 for 7. Robert McKinley (17) added 46 for the 8th wicket with Getkate, who then found a willing ally in Mulder as the Knights fought back.
Irish international George Dockrell claimed 4 for 51, while fellow spinner Yaqoob Ali picked up 3 for 35 in an impressive bowling display, while Tyrone Kane (2-16) was the best seamer on show.
Lightning have now claimed two of the three interprovincial trophies on offer and will be hoping to complete the clean sweep when they take on the Warriors at Malahide next month in the Champioship. The Knights are back in action on Friday when they travel to Strabane to face the Warriors in the final T20 game of the season.
HANLEY ENERGY INTERPROVINCIAL CUP
At Rathmines,
NORTHERN KNIGHTS 246 all out (48.3 overs; S Getkate 87, Nik Smith 33, J Mulder 31, J Shannon 30, G Thompson 25, G Dockrell 4-51, Yaqoob Ali 3-35, T Kane 2-16)
LEINSTER LIGHTNING 248/6 (47.5 overs; S Terry 85*, L Tucker 50*, D Joyce 28, S Doheny 26, M Sorensen 25, Nat Smith 2-41)
Leinster Lightning beat Northern Knights by 4 wickets.