The Serb's attempts to win a third successive title at the ATP 1000 hard-court event proved in vain as Federer stormed through their semi-final in straight sets, ending Djokovic's 28-match winning run in China.
Federer was the first to put pressure on his opponents' serve in the fifth game and, although he missed his first break point, the second was converted to move ahead.
He consolidated that break before serving out for the opening set.
Djokovic was noticeably out-of-sorts, as his normally aggressive game failed to make an appearance, while his forehand faltered to give Federer further openings.
The Swiss broke in the first game of the second set and had another six chances to pull further ahead in the remaining games.
Djokovic saved the fourth of those in the fifth game and managed to hold his nerve again in the ninth, as Federer saw two match points slip away.
However, Federer was not to be denied as he served out for the match, sealing the win with a cushioned drop shot at the net.
He will meet Simon in Sunday's decider after the world number 29 booked the second Masters final appearance of his career earlier in the day, with a 6-2 7-6 (7-1) win over Feliciano Lopez.
The Frenchman took control of the match in the middle of the opening set by reeling off four consecutive games, while he only dropped three points on serve as Lopez struggled to make any impression.
Having wrapped the opener up in 26 minutes, Simon continued to impress on serve, he only lost four points in the second set but Lopez upped his game and was able to save two break points in the third game.
However, the Spaniard's game deserted him in the tie-break as Simon won the opening four points before sealing his straight-sets win.