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A repeat performance was not meant to be, as Clijsters was wide on match point to end any chance at becoming the eighth woman to repeat as Aussie champion.
Azarenka is 3-3 in her career against Sharapova, with two of those wins coming in finals.
The winner of Saturday's title match will become the new world No. 1, supplanting Clijsters' quarterfinal victim, Caroline Wozniacki. Sharapova has not held the top ranking since the week of June 8, 2007.
Kvitova beat Sharapova in straight sets to win her first Grand Slam last July, but trailed early against the three-time major titlist on Thursday at Melbourne Park.
Sharapova, seeded fourth, lost the second set, and was down 0-30 at 4-4 in the third before a replay reversal gave her new life. The Russian won the next four points to put the pressure back on Kvitova, who could not hold serve thanks to several unforced errors in the final game.
The 22-year-old Azarenka, meanwhile, became the first Belarusian woman to reach a Grand Slam final since Natasha Zvereva was the runner-up at Roland Garros in 1988 when she was representing the Soviet Union.
If this was, in fact, the Belgian's final visit to the season's first major, she went down fighting. Azarenka broke Clijsters' second service game of the match, then fought off four break chances in the proceeding game.
Azarenka held serve with relative ease the rest of the opening set to stay in the driver's seat, but Clijsters began her comeback by breaking at love on Azarenka's first service game in the second.
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