Stosur has a 3-2 record against Wozniacki, winning their last two matches.
In a match with 18 breaks of serve, the third-seeded Wozniacki won five consecutive games against Arvidsson to take the first set. Both players then struggled with their serves for the rest of the match.
The 11th-ranked Dane was serving for the match at 6-5 in the second set but was broken. Wozniacki was broken again while serving for the match at 5-3 in the third but finally clinched the victory when the 46th-ranked Swede netted a backhand in the 10th game.
"I was really fighting out there," Wozniacki said. "It's tough on this surface to finish off the point. This surface suits her game much more than mine and she could get lots of balls. Besides, she was playing really good this week. I'm just happy to make it to the final."
Ivanovic won four consecutive games in the first set but Stosur broke in the eighth game of the second to stay in the match. She then made a decisive break in the seventh game of the decider and sealed the victory on her first match point with a backhand down the line.
"In the first set Ana was playing quite well making good first shots in the rally, which forced me to play in defense," Stosur said. "But in the second set I started serving a lot better and played much more accurate on return. I improved my movement and started playing more offensively and with that I managed to reverse and win the match."
Ivanovic took a medical time out at 3-2 down in the third set to have her right hip treated and bandaged. She said she first felt pain in her hip at 2-1 in the second set and "it got gradually worse and it's still sore walking."
"It's really disappointing, but it was quite a good match," Ivanovic said "I was still trying to come in and I just did two more errors here and there. I thought I still had chances in the second set. But she played well and it was a high-quality match."
Later Saturday in the men's semifinals, Malek Jaziri was scheduled to play second-seeded Andreas Seppi of Italy, while Croatian veteran Ivo Karlovic was to play fourth-seeded Brazilian Thomaz Bellucci.