The No.1-seeded Kerber was the first to move through, winning nine games in a row from 3-2 in the first set to shut the door on No.4-seeded Carla Suárez Navarro in a 51-minute demolition, 62 60.
It was sweet revenge for Kerber, who lost the pair's only previous meeting at the US Open recently.
"I lost to her at the US Open and it was mentally a little bit tough today, but I was just trying to play aggressive and I played really well today," Kerber said. "I feel good about my game right now. I'm feeling better and better after every match and I'm really excited to be in the finals here now."
The No.3-seeded Ivanovic followed Kerber into the final with a 67-minute, 64 64 victory over Stefanie Voegele, an unseeded player who had taken out No.2 seed Sloane Stephens in Friday's quarterfinals.
"It was a very tough match - it's always tough playing someone you don't know," Ivanovic said. "I had a lot of chances in the beginning, and I think that created a lot of tension, but I'm happy I could stay calm at the end of the first set and then same thing in the second set. But she played really well."
"Someone told me today that no one has won this tournament three times, so I hope I can achieve that," Ivanovic said. "I'm really happy to be in the final again here. I'm really looking forward to it."
Ivanovic leads Kerber in their head-to-head series, 3-1, though Kerber's only win in the series did come in their most recent meeting, just a few weeks ago at the Toray Pan Pacific Open over in Tokyo.
Ivanovic was asked what she expected from the final. "Revenge from Tokyo?" she joked. "It would be a really good win for me, obviously. But she's playing really well lately. Over the last few weeks she's really raised her level. But I've had two tough matches here and I played well in them, so I hope I can have a good sleep tonight, recover well from the last few days, and then keep that level up tomorrow."
One thing Ivanovic has going for her in the match-up is a much better record in WTA finals - the former World No.1 is an impressive 11-4 in WTA finals, while Kerber has a losing 2-5 record in WTA finals.