Williams, who is bidding to win her fifth title at Melbourne, needed two tie-break sets to overcome the plucky challenge of Li Na 7-6 (7/4), 7-6 (7-1) in a shade over two hours.
Henin spent less than half that time on court as she breezed through her semi-final against the unseeded Zheng Jie 6-1, 6-0 in just 51 minutes.
It was by far Henin's easiest match of her difficult passage to the final that has seen her beat world No 5 Elena Dementieva, Yanina Wickmayer (16) and Nadia Petrova (19) before facing the daunting prospect of the world No 1 in tomorrow night's final.
The 27-year-old's run has reprised memories of her countrywoman Kim Clijsters' own remarkable return at the US Open last year, when she returned from retirement and becoming a mother to lift the trophy at Flushing Meadows.
Henin is competing in just her second tournament back after a 20-month retirement and has admitted to feeling fatigued in between matches as she reacquaints herself with the rigours of the tour. But after her serene passage yesterday, the seven-time grand slam winner is confident she will be in peak condition for the final.
"I've been playing a lot of tough matches in the last two weeks so that was the best to recover today," she said. "I knew it could be a dangerous match. Especially in my situation, I was very excited about the possibility of being in another grand slam final.
"I knew I had to be really careful about that match. I've been very focused, very concentrated. I did my job perfectly well. That worked pretty good. I'm very excited about what's going to come up for me and can't wait for it now."
Williams admitted she had been fully tested by Li as she was forced to dig deep for the second match running to progress. The American had needed four match points before she finally won the contest with an ace.
"I had so many match points and I blew it," a relieved Williams said. "I knew on serve (in the tie-break] I had the chance to close it out and I did. I had to because she is an amazing fighter."
Williams and Henin have remarkably never met in a grand slam final despite sharing 18 titles between them, although the Belgian beat her American rival in the quarter-finals of three grand slams in 2007 – the year before she retired.
"I just always used to meet her in the quarter-finals," Williams said. "She was doing everything and beating me really bad. I definitely think of her as a rival. I think we bring out the best game in each other. I think that we both just play our hearts out. I think that's what creates a good rivalry."
It was a disappointing day for the beaten Chinese duo after their record run to the semi-finals.
It was the first time two players from China had reached the last four of a grand slam and both were philosophical in defeat.
"I lost the match so I was a little bit sad, but it was a good day for my tennis," said Li, who will break into the top ten for the first time after her performances at Melbourne Park. "I am happy for what I have done."
Zheng admitted she had been outclassed as she lost 12 consecutive games after winning the opener to lose the match.
"She played so well today, she didn't look like someone playing in her second tournament," Zheng said. "At the start of the first set I won a game and then she wasn't feeling too well when I had a break chance. But after that she played super. I never had a chance."
Li and Zheng form the vanguard of China's push into the top ranks of world tennis and along with Yan Zi and 43rd-ranked Peng Shuai, have been rewarded with freedoms rarely granted at home, where top athletes remain yoked to the state sport system.
After increasing friction between players and officials over training arrangements and pay, the Chinese Tennis Association allowed the four to "fly away" and organise their own coaches, tours and scheduling. The decision, while criticised by more conservative officials in China, has been validated with Li and Zheng's success at Melbourne Park. Both said they have benefited from the freedom to train and rest at will, and from more specialist coaching available to them.