Defending champion Federer, who has been dealing all week with lingering flu-like symptoms, had a 6-1, 6-4 win Saturday over eighth-seeded Dominic Thiem, while Raonic beat local hope Bernard Tomic 7-6 (5), 7-6 (5) in the earlier semifinal.
Federer held off Raonic in three sets here last year, earning his 1,000th career match win as he clinched the title.
"It was my best match of the tournament. I hit the ball very well. I'm very excited to be back in the final -- it's special playing Milos again tomorrow," said Federer, who is one win away from his 89th career title. "I've come here three times now and three times I've made the final, so I'm very happy."
Federer lost to Australia's Lleyton Hewitt in the 2014 final, his first trip to the Brisbane tournament.
There were no service breaks in the first of the semifinals but Raonic dominated the tiebreakers, racing to 5-1 leads in both and then holding off Tomic after the Australian leveled each tiebreaker at 5-5.
The Canadian missed the French Open last year because of a foot problem and later dropped out of the top 10.
"It's sort of confirming to myself and the people close to me that we're on the right track, doing the right kind of work, and the progress is there," Raonic said of his confident start to the season. "So tomorrow is a great test for me, and one that I'm going to try to make the most of."