Venus and Serena Williams will meet in a Grand Slam final for the ninth time after the American sisters came through their semi-finals in Melbourne.
Thirteenth seed Venus, 36, beat fellow American Coco Vandeweghe 6-7 (3-7) 6-2 6-3 to reach her first major final since 2009.
World number two Serena, 35, saw off unseeded Croat Mirjana Lucic-Baroni 6-2 6-1 in the second semi-final.
Serena is attempting to win an Open-era record 23rd Grand Slam singles title.
It would also be a seventh Australian Open victory for the younger Williams sister, while Venus hopes to win an eighth major title, first in Melbourne and first since Wimbledon in 2008.
“It is unbelievable to watch Serena play tennis – the way she hits the ball and the competitor she is,” Venus Williams said after the first semi-final.
“It would be a dream to see her on the opposite side of the net on Saturday.”
Speaking after her win, Serena said: “I am really proud of Venus, she is a total inspiration and a big sister. I am really happy for her and to be in the final together is a dream for us really.
“She is my toughest opponent, no-one has ever beaten me as much as Venues.
“I feel no matter what that we have both won after all we have been through. I know a Williams is going to win this tournament.”
Vandeweghe, 25, had played superbly in seeing off world number one Angelique Kerber and French Open champion Garbine Muguruza to reach the last four, but she could not maintain that level in the semi-final.
The world number 35 deservedly took the first set on a tie-break but it was the experience of Williams that eventually prevailed.
Williams converted four of five break points, but more importantly reduced Vandeweghe to just one from 13 as the younger American was reduced to throwing her racquet in frustration as the chances slipped by.
Two double faults handed Williams a decisive double break in the second set and the seven-time Grand Slam champion broke again at the start of the third.
Vandeweghe stayed close enough to keep the pressure on, saving three match points before finally cracking with an error on the fourth, prompting a jubilant twirl of celebration from Williams.
“Everyone has their moment in the sun. Maybe mine has gone on a little longer than other people, but I have nothing else to do,” joked Williams.