Li, 30, defeated the world number two 6-2, 6-2 in 1hr 33min and will now face the winner of Thursday´s second semi-final between world number one Victoria Azarenka and American teenager Sloane Stephens.[break]
"Every time I´m back in Australia, I always feel something here," said Li, the 2011 runner-up. "I always play well here. Everyone can be nervous in a final, so I have to enjoy it. I´m looking forward to the final."
Sharapova had lost only nine games in her march to the semi-finals, a tournament record, but Li was always going to provide a far sterner test despite trailing 4-8 in their head-to-head encounters.
And the Russian started disastrously with consecutive double faults as she was broken in the opening game.
Four-time major winner Sharapova could have returned to the world number one ranking had she won her second Australian Open title, but Li´s ball striking had her on the back foot from the outset.
Benefiting from her intense off-season fitness training under new coach Carlos Rodriguez, Li was untroubled by the sweltering heat in Melbourne and broke for a second time to take a 4-1 lead.
Her serving was steady, and her groundstrokes were probing. Two close video rulings went against Li and Sharapova retrieved one of the service breaks, only to hand it straight back.
China´s 2011 French Open champion closed out the opening set in 48 minutes, but she then missed a sitter of a forehand in a worrying sign at the beginning of the second set.
She resolutely held her serve, however, and Sharapova stumbled in the fifth game. The fifth of Sharapova´s six double faults handed Li another chance to break and when the Russian went long with a backhand, Li led 3-2.
She led 40-15 in the next game but Sharapova unloaded some ferocious winners to reach break point. Li recovered to move within sight of the finish line, breaking again for 5-2.
Li lost her first match point by hooking a forehand wide, but she then polished off the upset victory as Sharapova finished with a ruinous 32 unforced errors.
Sharapova admitted Li´s superior aggression had won the day and left her unable to find a way back into the match.
"I think she played a really great match. She was certainly much more aggressive than I was, dictating the play. I was always on the defence," said the 25-year-old Russian.
"When I had my opportunities and break points in games that went to deuce, I don´t think any of them really went my way today."
Azarenka reaches final with controversial win
World number one Victoria Azarenka ended the dream run of American teenager Sloane Stephens in controversial fashion Thursday to set up an Australian Open final against China´s Li Na.
Azarenka, who will retain top spot on the rankings if she defends her title at Melbourne Park, needed six match points to defeat Stephens 6-1, 6-4 in 1hr 41min and move into Saturday´s championship decider against Li.
"I almost did the choke of the year," Azarenka said, after losing five match points while serving at 5-3 in the second set. "So many chances. I felt a little bit overwhelmed. Nerves got to me, for sure."
In a dramatic ending, in scorching heat on Rod Laver Arena, Azarenka let slip five match points when she was serving for the match, before being broken for 5-4.
The Belarusian then called a medical timeout and left the court for 10 minutes to receive treatment for rib and knee complaints. When play resumed, Stephens was unable to hold serve and Azarenka made it into the final.
"It was important to overcome this little bit of struggle," Azarenka said.
"I couldn´t lose. I just couldn´t. That was why I was so upset. I couldn´t breathe out there. It´s a tremendous achievement and I´m so happy I pulled it through."
Stephens was coming off her upset of world number three Serena Williams on Wednesday, and much depended on how she handled her new-found superstar status.
Losing her opening service game was a portent of the hardships to come in a match that Azarenka completely dominated until her attack of nerves.
Azarenka slipped to a 2-0 lead. A strong service game from Stephens put her on the scoreboard but the American´s groundstrokes were failing to hit the mark and the world number 25 made 16 unforced errors in the opening five games as Azarenka went two breaks ahead.
When Azarenka landed a perfect half-volley, backhand lob to take the first set in 33 minutes, Stephens had already racked up 19 unforced errors.
Azarenka jumped to another 2-0 lead to begin the second set. At 0-30 in the following game, she pulled up quickly, and appeared to be favouring her left knee.
She showed no discomfort in subsequent rallies. Stephens temporarily stemmed the flow of errors and broke Azarenka for the first time in the match, keeping herself in the hunt at 1-2.
Azarenka was limping, but she went on a run of nine straight points while taking a 4-2 lead. She appeared certain to romp through the final games but errors and double faults gave Stephens an unexpected reprieve.
Serving at 3-4, with the crowd behind her, Stephens missed a routine smash on the way to being broken for the sixth time in the match.
Azarenka then passed up five match points in her anxiety-riddled attempt to serve out the clash, and called for the trainer at the changeover.
She took a 10-minute medical timeout and left the court. When she returned, Stephens was serving to stay in the match but Azarenka snuck through on match point number six.
The 23-year-old Azarenka must defeat Li in the final to retain her number one ranking. Otherwise, America´s Williams will take top spot.
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