Djokovic came through 1-6 7-5 6-4 6-7 (5/7) 12-10 in five hours and two minutes of absorbing tennis against an opponent who was inspired.
Nishikori, the 16th seed, offered little threat to the Spaniard who won 6-2 6-1 6-4 in two hours and 10 minutes to advance to his third successive quarter-final in Melbourne.
Ferrer broke twice in each of the first two sets to set up a comfortable win. The third was wild as Nishikori started to go for broke but, hampered by a knee injury, he failed to seriously threaten Ferrer's chances of victory.
The fourth seed said: "It was a tough match but in the first two sets I didn't make any mistakes.
"Today [Sunday] I played very well, it was one of the best matches of my career at the Australian Open.
"I'm happy with my game."
His run this week means Ferrer will move into the top four of the world rankings but the modest 30-year-old admits he is some way behind established quartet Novak Djokovic, Roger Federer, Andy Murray and the injured Rafael Nadal.
He added: "I am only in the top four because Rafa has been injured for a long time. That is the truth.
"I think the top four, they are better (than me)."
Ferrer will take on another Spaniard, Nicolas Almagro, in the last eight after he advanced when Janko Tipsarevic had to withdraw through injury.
Serbian Tipsarevic won his previous two matches - against Lukas Lacko and Julien Benneteau - in five sets but was trailing 6-2 5-1 when he pulled out with a jarred heel.
Almagro said: "That's not the way you want to win. But that's sport.
"Sometimes you can't do your best and you need to stop. I think he made the best decision."
Almagro, seeded number 10, has lost all 12 of his previous matches with Ferrer but is hoping to buck that trend and reach his first grand slam semi-final.
"It will be a good fight. I know him and he knows me," he said.
"It is a big opportunity for me to be in a semi-final. I'm ready to fight. I'm healthy and happy with my tennis.
"I think I'm playing really well and we'll see what will happen on Tuesday."
Maria Sharapova continued her blistering form at the Australian Open by brushing aside Kirsten Flipkens to reach the quarter-finals on Sunday.
The Russian won 6-1 6-0 in 68 minutes and has now dropped just five games in her four matches in Melbourne.
Belgian Flipkens was simply outclassed as Sharapova eased into a rematch with countrywoman Ekaterina Makarova.
The pair met here at the same stage 12 months ago with Sharapova winning 6-2 6-3.
Sharapova said: "I'm certainly happy to be playing this well but it's the quarter-finals and it only gets tougher from here."
The second seed's progression to her 18th career grand slam quarter-final was never in doubt.
She broke for a 2-1 first-set lead and never looked back, further breaks in games five and seven handing her a one-sided first set.
Her intensity did not drop in the second either, denying Flipkens a game as she followed up her thrashing of Venus Williams with another dominant display.
Makarova's love affair with Melbourne continued as she made it through with an impressive defeat of fifth seed Angelique Kerber.
Her best effort at a grand slam came here last year with a run which included a stunning upset of Serena Williams.
And she matched that achievement of reaching the last eight by playing the role of giantkiller once again on Rod Laver Arena, knocking out German Kerber 7-5 6-4.
"It's an unbelievable feeling, I really like playing here," the Russian said.
"I lost three times to Angelique last year, she is so good so I am very happy."
Makarova also got her wish of a rematch with Sharapova.
"Last year I was surprised to reach that stage and I had so many thoughts in my mind," she said. "This year I will be ready to play a good game."
Makarova was the more positive player throughout against Kerber and held herself together after squandering a 5-2 first-set lead.
She broke for 6-5 and then served it out to edge ahead.
Kerber's chances of finding a route back into the contest were hampered by a back injury and a solitary break in the ninth game proved decisive.