Sharapova has won all 10 sets she has played on Madrid's outdoor red clay court. Williams, however, boasts a 12-2 record against the Russian.
After a skittish start, Williams dominated Errani and broke her final service game in both sets.
"I feel I played solid," Williams said. "In the second set more than in the first, I made a few less errors, which is something I needed to do."
The defending champion improved to 5-0 against the seventh-ranked Errani and to 30-2 this year.
Williams said Sharapova will pose a difficult challenge.
"I feel this whole tournament I have only played clay-court opponents," said Williams. "All have been smaller than me. Tomorrow will be a different game, more power."
Later Saturday, Rafael Nadal played fellow Spaniard Pablo Andujar and Tomas Berdych faced Stanislas Wawrinka in the semifinals of the men's event.
Williams struggled with her shot-making early, uncharacteristically misfiring on three smashes in the first set, which she still managed to pull out after falling behind 3-1.
The 15-time Grand Slam winner then started clicking with her serve and held two games to love, but she needed four set points before finally breaking Errani with a forehand winner placed just inside the line to grab the lead.
Ahead a set, Williams pressed her advantage and eased through the second.
On Sunday, Williams will play her first final on red clay since 2002. Last year's trophy at the Caja Magica came on the experimental blue clay surface that was removed following players' complaints it was too slippery.
After Sharapova won the first set, Ivanovic opened a 2-0 lead in the second. But Sharapova responded and stole her serve twice, sealing the second break with a lob over the top of her Serb rival.
Sharapova has beaten Ivanovic, a fellow former No. 1, in their last six meetings.