We investigate the impact of site dilution by setting the on-site repulsion strength (U ) to zero at a fraction of sites in the half-filled Hubbard model on a simple cubic lattice. We employ a semi-classical Monte-Carlo approach first to recover the zero dilution (undiluted x = 1) properties, including U dependence of insulator to metal crossover temperature scale T * and long-range staggered antiferromagnetic ordering temperature (TN ). For the non-perturbative regime of U ∼ bandwidth, we find a rapid suppression of T * with reducing x from 1 to 0.7. However, TN remains unchanged in this dilution range, showing a weakening of the insulating state but not of the magnetic order. At x ≤ 0.7, T * and TN coincide and are suppressed together with further increase in site-dilution. Finally, the system loses the magnetic order and the insulating state for x = 0.15, significantly below the classical percolation threshold x sc p (∼ 0.31). We show that the induced moments on U = 0 sites drive the magnetic order below the classical percolation limit by studying local moment systematics and finite-size analysis of magnetic order. At the end, we show that either increasing U to large values or raising temperature beyond a U dependent critical value, suppresses the induced local moments of the U = 0 sites and recovers the classical percolation threshold.