Clijsters, on what could have been her last appearance down under as she is due to retire at the end of the season, fought hard but Azarenka's bludgeoning ground strokes proved too much as the Belarusian won 6-4 1-6 6-3 in two hours and 12 minutes of absorbing tennis.
The Belgian's impending departure from the women's game means the chasing pack are jostling for position and on this evidence Azarenka will be at the forefront.
Her powerful all-court game has seen her knock on the door for a number of years but the way she regrouped after losing the second set suggests she is becoming a more complete player.
She also had to come through some nervy moments in the final stages but did so impressively to set up a meeting with either Maria Sharapova or Petra Kvitova in Saturday's final.
"I don't know if it's the toughest (match of my career), but it's one of the most emotional," she said.
"I think every single person has experienced nerves but it's how you deal with it.
"I felt like my hand weighed about 200kg and my body was 1000kg, everything was shaking but that feeling when you finally win is such a relief, I just want to cry."
"I was just trying to stay in the moment.
"Kim really took over in the second set and I felt there was nothing I could do. In the third I just tried to let my shots go a little bit.
"I am really glad that I fought for every ball."
On her improved mental attitude, she joked: "I think before you all thought I was a mental case but I was just young and emotional."
Azarenka was outstanding in the early exchanges, her greater weight of shot pushing Clijsters further behind the baseline and she was quick to punish the short ball.
She broke for a 2-1 lead and overcame some uncertain moments on serve and a noisy flypast to celebrate Australia Day to see out the set.
The second was a complete contrast as Azarenka started to throw in numerous unforced errors and the experienced Clijsters seized her chance, winning it in 36 minutes to level matters.
Previously that would have signalled the beginning of the end for Azarenka but she displayed her new-found mental fortitude to claim a 4-1 lead despite Clijsters' best efforts.
The four-time grand slam champion was staring down the barrel at 4-2 40-0 down but in a courageous last stand hit back to break and get it back on serve.
But again, Azarenka stood firm, a crushing forehand seeing her break back and she served it out.
"I'm disappointed but I feel like I have given my all these last two weeks," said Belgian Clijsters.
"The match was very close but she played really well. She was playing aggressive tennis, moving really well. She deserved to win at the end."