The sisters are to meet in a grand slam final for the ninth time, their first since their 2009 meeting at Wimbledon, after Venus, 36, recovered from dropping the opening set to come back and beat fellow American Coco Vandeweghe 6-7 (3-7) 6-2 6-3.
That win saw the thirteenth seed join Serena, 35, after her comfortable straight sets victory over fellow veteran Mirjana Lucic-Baroni.
Serena Williams is hoping to set a new Open-era grand slam record in Melbourne, with a victory on Saturday to take her haul to 23 singles, surpassing the tally of Steffi Graf.
Serena holds a 16-11 head-to-head record lead over her older sister, with a 6-2 lead in grand slam finals. The two fought for the Australian Open title 14 years ago in 2003, with Serena taking the glory on that occasion.
Venus has seven grand slam titles to her name but is yet to win in Australia. "When I'm playing on the court with her, I think I'm playing, like, the best competitor in the game," she said over the prospect of facing her sister again in her post-match interview. "I don't think I'm chump change either, you know. I can compete against any odds. No matter what, I get out there and I compete.
"So it's like two players who really, really can compete, then also they can play tennis. Then, okay, won't be an easy match. It's like I know that it won't be easy. You have to control yourself, then you also have to hopefully put your opponent in a box. This opponent is your sister, and she's super awesome. It's wonderful."
This year's Australian Open has had a distinct throwback feeling to it. Following the eliminations of Novak Djokovic and Andy Murray, Rafael Nadal and Roger Federer, formally the two most dominant competitors in the men's game, are hoping to meet in a grand slam final for the first since 2011, if they can overcome Grigor Dimitrov and cin their respective semi-finals.