Fourth seed Federer went a set down to the world number two in the ATP 500 hard-court event, but fought back to claim a 3-6 6-3 6-2 triumph - his first over the Serbian for 18 months.
The tie got off to the best possible start for Djokovic as he stormed into a 3-0 lead, winning each of his service games to move into the ascendancy.
Federer hit back in the second set, though. After Djokovic had wasted a break point at 2-2, the Swiss broke the world number two to move into a 4-2 lead.
And that would prove the turning point, as Djokovic subsequently failed to record a single break.
Federer claimed the first game of the deciding set against serve, before his opponent saw two chances to level matters come and go.
Djokovic soon found himself 5-2 - and two breaks - down, and squandered two further break points prior to Federer completing victory.
Federer will now meet Tomas Berdych in Saturday's final, after the Czech edged Germany's Philipp Kohlschreiber 7-5 7-5 in a tight encounter.
Kohlschreiber broke immediately, and looked to be heading for victory in the first set as both players comfortably held serve thereafter.
However, leading 5-4 and faced with the prospect of serving for the set, Kohlschreiber's form crumbled as he opened the door for Berdych to pull level at 5-5.
Third seed Berdych then claimed the 11th game to love before winning the set on his opponent's serve.
The second set looked destined for a tie-break, but Kohlschreiber's nerve let him down once again as Berdych sealed a place in the final with the only break of the set at the death.