The 19th seed Keys powered through a thrilling semi-final on a final-set tiebreak against the world number two 5-7, 6-1, 7-6 (10/8) after Sabalenka had earlier 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 see-sawing, marathon battle in 2hr 35min.
It is the American's first final in Melbourne.
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 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 11th seed Badosa.
It was very different in the second of the semi-finals, as Keys flew out of the blocks and broke Swiatek in the opening game - the first time the Pole had dropped her serve since the first round.
It signalled the start of a roller coaster first set in which both players struggled for control. Three breaks each were exchanged before Swiatek finally edged it on her second set point after 49 minutes.
The world number two was far from convincing, and the second set saw a massive turnaround.
Keys surged back in sizzling fashion, breaking Swiatek four times, unleashing three huge aces in one game, as she took it to a deciding third set where she saved a match point before finally getting over the line.
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."
Sabalenka is closing on a third consecutive Melbourne crown - something that hasn't happened this century.
The last person to achieve the feat was Martina Hingis in 1999 and only four other women have completed the three-peat - Margaret Court, Evonne Goolagong, Steffi Graf and Monica Seles.