Spanish top-seed Nadal defeated the 17-time Grand Slam champion 7-6 (7/4), 6-3, 6-3 in a dominant semi-final win lasting two hours and 24 minutes on Rod Laver Arena.
Federer was confident of a better showing after failing to beat Nadal in Grand Slams since the 2007 Wimbledon final, but the world number one was relentless in taking apart the much-decorated Swiss.
In 33 meetings in their great, if one-sided, rivalry, Nadal now leads Federer 23-10 and has won their last six matches in Slams as well as their last five meetings on all stages.
Nadal, the 2009 champion, will line up in his third Australian final against Wawrinka and he has yet to lose to the Swiss eighth seed in 12 matches.
"We played some really tough rallies at the end of the first set and I resisted really well because Roger was trying to play very aggressive and taking the ball very early," Nadal said.
"I think tonight I played my best match of the tournament, so I am very happy for that."
With the loss, Federer also ceded the mantle of Switzerland's number one player, an honour he has held since 2001, to Wawrinka.
Nadal, seemingly untroubled by a large blister on his serving hand, progressively got stronger during the semi-final and broke Federer's serve four times and lost his only once.