The 19th seed battled through a thrilling semi-final on a final-set tiebreak against the world number two 5-7, 6-1, 7-6(8) after Sabalenka swept aside Paula Badosa in straight sets.
Five-time Grand Slam champion Swiatek had not dropped her serve since the first round but was broken eight times by Keys, who saved a match point on her way to edging a titanic battle.
It will be the American's first final in Melbourne, and only her second in Slams, and she broke down in tears after finally getting over the line in two hours and 35 minutes.
It was the first time an Australian Open semi-final had been decided by a third-set 10-point tiebreak.
"That match was just such a high level and she played so well," Keys, 29, said.
"I felt like I was just fighting to stay in it and then obviously really kind of ran with the second and then the third was just a battle.
"To be able to be standing here and be in the finals is absolutely amazing and I'm so excited that I get to be here on Saturday."
Keys confessed she couldn't recall much detail about the final set where she saved a match point.
"In the third set, it was just so up and down. I feel like I blacked out at some point," Keys smiled.
"Just to be able to stay in it and just keep fighting and then a 10-point tiebreaker for a dramatic finish."
Earlier, Sabalenka put her close friendship with Badosa aside to stay on track for a 26-year first.
The Belarusian world number one romped home 6-4, 6-2 on Rod Laver Arena against 11th seed Badosa.
Keys predicted a slug-fest between two of the hardest ball-strikers in the women's game in Saturday's showpiece.
"Definitely some big hitting. I think that is going to happen," Keys said.
"Not a lot of long points but she is obviously going for her third Aussie Open and I'm excited to get to play here."