The 18-year-old was rewarded for some heavy hitting as he won 7-6 (7-5) 6-2 against the world No 12.
World No 3 Thiem awaits in the final after he beat 42-year-old Tommy Haas 7-6 (7-4) 6-3.
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Thiem won the Berlin final on grass in midweek but was made to work hard in the first set by Haas, who had two set points at 6-5 after a fantastic drop shot.
Bett1 Aces Highlights: Dominic Thiem overcomes Tommy Haas
The German couldn't convert either and, after losing the tie-break, ran out of steam in the second set.
It was a similar story in the other semi-final.
Bautista Agut started brightly and led 3-1 after an early break, but Sinner fought back and spurned two set points at 5-4.
Bett1 Aces Highlights: Jannik Sinner vs Roberto Bautista Agut
The Spaniard also missed an opportunity in the next game as he failed to break from 0-40.
That proved a turning point in the match as Sinner edged a tight tie-break and then pulled away in the second set, finishing with 10 winners compared to just two from Bautista Agut.
Petra Kvitova reached the final of the women's event with a battling win over Andrea Petkovic.
The German won the first set, but Kvitova came through 3-6 6-4 10-5 and will face either Anastasija Sevastova in the final after she thrashed Elina Svitolina 6-1 6-1.
Bett1 Aces Highlights: Petra Kvitova battles past Andrea Petkovic to reach final
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