The pair held a packed Rod Laver Arena spellbound with four hours of top quality tennis studded with breathtaking rallies before the Swiss emerged a 2-6 6-4 6-2 3-6 9-7 winner to snap a 14-match losing streak against the second seed.
Wawrinka had come close to beating Djokovic in a five-hour epic in the fourth round here last year and another five-set thriller in the semi-finals of the U.S. Open last September - only to fall agonisingly short.
The 28-year-old finished the job on Tuesday, though, riding his thunderous serve and summoning up some brilliant shotmaking, particularly off his backhand, to claim what could be a career-defining win when Djokovic fluffed a volley.
"He's an amazing champion, he never gives up. I'm really, really, really, really, really, really happy," said Wawrinka, whose path to a first grand slam final is blocked by Czech Tomas Berdych.
"After losing two times against him in grand slam in five sets, I'm really happy to take that one. It's great for me."
Defeat for Djokovic in his first major tournament under new co-coach Boris Becker ended his run of consecutive grand slam semi-finals at 14, his winning streak in tour events at 28 matches and his unbeaten run at Melbourne Park at 25.
"This is probably the court where I had most excitement in my tennis career," said the four-times champion.
"These are kind of matches that you work for, you live for, you practice for. Unfortunately somebody has to lose in the end. This year it was me. I lost to a better player."
Czech Berdych came out on top 6-1 6-4 2-6 6-4 in a three-hour arm-wrestle against David Ferrer to reach the last four at the year's first grand slam for the first time.
Canadian teenager Eugenie Bouchard had earlier kept her poise in the biggest match of her life to oust Ana Ivanovic 5-7 7-5 6-2 and set up a semi-final against China's Li Na, who dispatched Flavia Pennetta 6-2 6-2.
The highlight of the day was always going to be the final match of the night, though, and Djokovic started in the same vein as in his impressive fourth round victory to claim the first set.
HUGE ROAR
Wawrinka stormed back to take the second and third sets but Djokovic again pounced to claim a break at 4-3 in the fourth, letting out a huge roar before sending the contest into a fifth stanza.
When the Serbian grabbed an early break in the decider, it looked like it might be a case of deja vu for Wawrinka but he lived up to his "Stanimal" nickname by muscling his way back into the contest.
"It was a really tough battle," said the Swiss. "Didn't want to let him win that one. Got a bit lucky there in the last one. He missed easy shots."
Big-serving Berdych has made a habit of steaming through the first week in Melbourne before falling victim to the first top seed he encounters and he made the most of his kind draw against baseline hustler Ferrer.
After cruising to a two-set lead over the Spaniard, he faltered in the third before finishing off the third seed for his first ever victory on the centre court at Melbourne Park.
"It's really great feeling," said the seventh seed. "It's been a very special match for me. I'm extremely happy to go through."
Ivanovic had cleared her own path to the final by upsetting world number one Serena Williams in the fourth round but was unable to take advantage against Bouchard.
The Serbian looked on course for a first grand slam semi-final since her 2008 French Open triumph after clinching the first set but Bouchard charged straight back into the contest to tie it up at 1-1 on an Ivanovic double fault.
Ivanovic tried to wrest back the momentum but as much as she ramped up her formidable forehand, there was no putting this particular Genie back in the bottle.
"It's not exactly a surprise," said 19-year-old Bouchard, the first Canadian to reach the last four in Melbourne.
"I always expect myself to do well. I'm not done. I have a match on Thursday. I'm just looking forward to that."
Bouchard lost her composure only once, when she was asked in her on-court interview who she would most like to date and declared a liking for pop star Justin Bieber.
Li's victory was, by contrast, a stroll by the banks of the Yarra River as she blasted her 28th-seeded opponent off the court to reach the semi-finals for the fourth time in five years.
After her victory, Li entertained the crowd on Rod laver Arena with another of the interviews that have made her a firm favourite at Melbourne Park - this time about how she would never smash a racket as she considers them friends.
It was left to her fellow thirtysomething Pannetta to assess the former French Open champion's form.
"I think she's just improved her game a lot in the last year," said the Italian, who was 2-2 in career meetings with Li going into Tuesday's match.
"She's really consistent. Today she was much better than me in the court."
