A high-level semi-final full of thundering serves boiled down to two tiebreaks in which the ice-cool Cilic proved the more composed player to set up a Sunday showdown with former world number one Novak Djokovic.
Unseeded Djokovic was given some trouble by Jeremy Chardy in the opening set but prevailed 7-6(5) 6-4 to take his record over the Frenchman to 11-0 and 26-0 in sets.
World number six Cilic was out-aced 16-11 but never gave Australian maverick Kyrgios a sniff of a service break.
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"It's special to play here and I've played great tennis throughout the week and it's great to have another shot at the title," the 2012 Queen's champion said on a sunny centre court.
"Nick is serving so good and it was tough to get a look on the service returns. As expected a couple of points made the difference in the tiebreaks."

Nick Kyrgios, Marin Cilic

Image credit: Getty Images

Kyrgios, ranked 21, had served 82 aces on his way to the semi-final and was in scintillating form against defending champion Feliciano Lopez on Friday.
He could not quite reach that level again but was still happy with his grasscourt form having lost narrowly to Roger Federer in the Stuttgart semis last week and beaten former Wimbledon champion Andy Murray for the first time at Queen's.
"The last couple of weeks, I feel pretty untouchable on serve. Today I just didn't have any chances to break at all," the 23-year-old told reporters.
His serve was a potent weapon again and in the eighth game of the first set he bashed down three consecutive aces before playing one of his trademark 'tweeners' to level at 4-4.
Cilic, runner-up to Roger Federer at Wimbledon last year and this year's Australian Open, was relentless, however, and seized on a couple of Kyrgios groundstroke errors in the opening tiebreak to pocket the first set.

Nick Kyrgios

Image credit: Getty Images

Kyrgios saved the only break points of the match, recovering from 15-40 at 2-2 in the second set.
As the set sped towards another tiebreaker, the pressure was beginning to tell on Kyrgios as he yelled "I can't focus".
Sure enough a Kyrgios double-fault at the start of the tiebreak gave the initiative to Cilic who quickly built a 6-3 lead and although he netted on his first match point he converted the second when Kyrgios skewed a backhand wide.
While Kyrgios will be frustrated, his level during the week augurs well for his Wimbledon prospects.
"I've played some good tennis, have played some tough opponents. I played a lot of three-setters and a lot of tennis. That's a positive. My body feels pretty good," he said.
Wildcard Djokovic seemed agitated at times as Chardy, who has won 12 of 13 matches on grass over the past three weeks, proved a tricky opponent.
The Frenchman made several errors in the tiebreak though and was broken at 4-4 in the second -- the only break of serve in the day's two semi-finals -- before Djokovic sealed the win.
He has a 14-1 winning record over Cilic but might be second-favourite on Sunday with the Croatian in superb form.
"I will play with two racquets! One in the right hand and one in the left hand!" Djokovic said when asked how he would cope with the power of Cilic's serve.
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