The world No.26 beat England's Daryl Selby, the world No.20 and five-time champion, in a tense 3-2 encounter in front of a sold out crowd.
The tournament boasts the strongest ever professional field to compete in Scotland, with three of the world’s top five players in the draw playing for a record prize fund.
Lobban will now meet world No.4 Karim Abdel Gawad of Egypt in the final on Sunday.
The Scot, who defeated world No.5 Paul Coll in the quarter-finals, said: "To win against Paul Coll in front of a home crowd was incredible, but to double up tonight against Daryl felt amazing. I've played Daryl many times before and he's a real ambassador for our sport and one of the best squash players to ever come out of the UK.
"It's great to be in the final again here, but I know what I'm up against. Karim is one of the top players in the world and I'll need to play my very best to win this title again.
"Whatever happens tomorrow, the fact we can bring these players to Scotland, and we as professional Scottish athletes can play against them in front of home crowds, is a real cause for celebration. I'll be giving it my all tomorrow."