A pulsating tie went the distance, 7-6 (7-3) 7-6 (10-8), after Kyle Edmund thrashed Feliciano Lopez and Nadal cruised past Dan Evans, and the deciding doubles rubber certainly delivered.
- Edmund crushes Lopez to give GB semi-final lead over Spain
- Nadal bagels GB's Evans to set up doubles decider in semi-final
There was nothing between the two teams for long periods as both sets went all the way to tie-breaks, and Spain came out on top in each to secure their place in Sunday's showpiece.
It was always Gerard Pique's dream for Spain to lift the Davis Cup in his revamped version of the famous competition, and it could well be on the cards as Canada await in the final.
The world number one Nadal and his 38-year-old partner Lopez stamped their authority on the contest when it mattered despite the match moving relentless with serve.
Spain edged the tie-break in thrilling fashion to take the opening set and delight the vociferous home crowd - all without Britain ever really faltering.
The second set was equally finely poised throughout with neither team able to find a way through and break serve.
Rafael Nadal of Spain and Feliciano Lopez of Spain celebrate holding a serve in their semi-final doubles match against Jamie Murray and Neal Skupski of Great Britain
Image credit: Getty Images
Emotions ran high throughout, from both the players and the fans, and Nadal lost his temper at the umpire in a big way over a crucial missed call.
But he kept himself in check thereafter to ensure that Spain remain favourites to win the Davis Cup for the first time since 2011.
After the set moved inexorably to the breaker, Spain again seized the initiative at the crucial moments and Nadal produced some superhuman points to haul his side to victory.
Britain can at least take some consolation from the fact that they are now guaranteed a place in next year's 18-nation finals as a result of reaching the semi-finals.