A former world number one who won the British Open in 2008 and 2012, Shin mastered the gusty conditions to take the lead after carding a five-under 67 with seven birdies to lead defending champion Lilia Vu who is second.
Shin is seven-under overall and the 36-year-old, who is nicknamed the 'Final Round Queen', has the opportunity to win the prestigious title and a cheque for $1,425,000 -- the highest amount in the event's 48-year history.
"This is my third time at St Andrews. That's how much I've played it, for so long," said Shin, who was tied for 11th after two rounds.
"I have a lot of experience with links course and with not tough wind like this, but I pretty much have a lot of good experience.
"So that's why I take all my skill today. The wind is nice to me today and I made two bogeys, but I think everyone can make one or two bogeys. So this is nothing, I just keep focusing forward."
Overnight leader Korda started poorly with back-to-back bogeys on the first two holes and she held a two-shot lead at the turn but she finished two shots behind Shin by the end of her round, carding a poor three-over 75 to sit third overall.
After another bogey on the 12th, there were audible gasps when she missed a putt and bogeyed the 13th hole as well.
That allowed Shin to go level at the top with a birdie on the 17th after a stunning approach shot across the green that landed and rolled to within two feet of the hole.
She was still level with Korda when she wrapped up on the 18th, but the American's nightmare round on the links course only got worse when she double-bogeyed the par-four 16th and also bogeyed the 17th to fall three shots back.
However, Korda and Vu birdied the 18th to stay in contention going into the final round.
