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Semenya, who bagged silver at last year's IAAF World Championships in Daegu, was nearly four seconds outside the Olympic qualifying standard of 1:59.90.
The 2009 world champion started slowly and was caught in a bunch early on, but hit the front before the bell.
She slowly pulled away over the second lap to win comfortably ahead of Mapaseka Makhanya who finished second in 2:04.89.
Another former world 800 m champion, Mbulaeni Mulaudzi, won the men's race in 1:46.41, also missing the qualifier for the London Games, by 0.81 seconds.
Simon Magakwe stormed to an impressive time of 20.38 seconds to win the men's 200m final, dragging two other athletes under the qualifying mark of 20.55.
Thuso Mpuang was second in 20.50 and Lebogang Moeng finished third in 20.51.
Tsholofelo Thipe also smashed the Olympic qualifying standard (23.10) in the women's 200m sprint, winning the final in 22.89.
Charlene Potgieter improved her own national record in the women's triple jump, with a best leap of 13.77 m, but she was nonetheless outshone.
Patience Ntshingila jumped 13.89m to better the SA mark set by Potgieter in Germiston in February.
