Dimitrov dictated terms in the opening set but had few answers when Kyrgios went on the offensive in the second and third sets.
Third-seeded Kyrgios, who won all three of his ATP titles in 2016, will face American Ryan Harrison in Sunday's championship match.
After his first win in three head-to-heads with Dimitrov, Krygios is confident.
"He's definitely one of the best players in the world at the moment. He had a great last year — beat me two times," Krygios said. "I knew I'd have to do something a bit differently today — I couldn't give him too much rhythm. And my serve came through again."
Kyrgios had two double-faults — against six from Dimitrov — was broken only once and won more than 80 percent of points when he got his first serve into play.
As for the final, Kyrgios said he'd worked himself into the tournament and was ready to win a title with little more than a week to go before the Australian Open, the first major of the season.
"My knee is sore, but it's good enough to play," he said of the taping over his left knee. "I hope I can keep serving like that tomorrow."
Harrison reached his third tour-level final with a 4-6, 7-6 (5), 6-4 win over Alex De Minaur, the 18-year-old Australian wild-card entry.
De Minaur, who defeated former Wimbledon finalist Milos Raonic in the second round, was two points from another upset when he led 5-3 in the second-set tiebreaker. But Harrison went on a roll to win the last four points of the tiebreaker to level the match, then got two early breaks to lead 4-0 in the third set to take control of the match.
Harrison was scheduled to partner Dimitrov in a doubles semifinal later Saturday but withdrew from the match, giving top-seeded John Peers and Henri Kontinen a spot in the final.
