Tomas Berdych to give himself a fourth crack at winning the Melbourne Park title.
Williams battled past gallant fellow American Madison Keys while Sharapova demolished Russian compatriot Ekaterina Makarova to ensure the top seeds meet in Saturday's showpiece.
The world's best two players have history and the odds are stacked in Williams' favour, with the 33-year-old holding a major psychological advantage.
She has a 16-2 record against Sharapova, with the Russian five-time Grand Slam champion losing their every encounter since 2004.
An impressive Murray swept into a fourth Australian final in six years as he zeroed in on the elusive title, dousing big-serving Czech Berdych 6-7 (6/8), 6-0, 6-3, 7-5.
There was plenty of friction between the two over Berdych's decision to hire former Murray team member Dani Vallverdu as his coach, with some steely glares at each other during the changeovers.
"I was disappointed to lose the opening set after I had a couple of chances at the end but I felt I was playing better as the set went on and I was very aggressive at the beginning of the second set," said the British sixth seed.
"In the beginning I was feeling quite rushed and then I got more aggressive and made him do more running."
Awaiting him in Sunday's final will be world number one Novak Djokovic or defending champion Stan Wawrinka, who play their blockbuster semi on Friday.
Despite the ominous statistics, Sharapova has been in outstanding touch and blew away fellow Russian Makarova 6-3, 6-2 on a blustery afternoon on Rod Laver Arena.
She is now in her fourth Australian final, having won in 2008.
Williams was made to work harder by rising teen Keys, who saved eight match points.
Coached by former US great Lindsay Davenport, Keys forced Williams to a first set tiebreak before her illustrious opponent took charge to win 7-6 (7/5), 6-2.
"I was just happy to get through it today," said Williams. "My theory now is to relax and just play the next match as best I can."
In reaching the final at 33, she became the oldest player to make the Australian Open decider in the Open Era, surpassing Chris Evert.
It also ensured that she keeps the number one ranking she has held for more than 100 weeks. Sharapova could have claimed the accolade if she had won the title and Williams had failed to make the final.
In another warning sign for Sharapova, her rival has won all five of the previous finals she has made in Melbourne. Williams is now in her 23rd major final, and has claimed 18 of them.
The Russian was undaunted and said her confidence was high.
"I think my confidence should be pretty high going into a final of a Grand Slam no matter who I'm facing and whether I've had a terrible record, to say the least, against someone," she said."It doesn't matter. I got there for a reason. I belong in that spot."
- Generous praise -
She went into her match against Makarova with a 5-0 record and always looked in control, despite intially struggling with her serve. She soon found her groove and took charge to race home in 87 minutes.
Going into Saturday's showdown, Williams has the added incentive of needing one more Grand Slam title to go clear second on the all-time Open Era winners list and further cement her name in the history books.
She currently has 18 alongside Evert and Martina Navratilova and is four behind Steffi Graf's 22.
Keys had beaten Williams' sister Venus to reach the last four and revenge was on Serena's mind, but the plucky 19-year-old had other ideas.
Despite being in her first-ever Slam semi, she held her own and earned generous praise.
"She's obviously a great player, she's going to be winning this tournament very soon and lots of other Grand Slams," said Williams.