Sharapova, the world's second seed, paved her way into the final round of the tournament by beating Ekaterina Makarova earlier on Thursday.
In turn, Williams ousted her compatriot Madison Keys earlier on Thursday 7-6 (7-5), 6-2 to send her into the finals.
Williams has come out victorious in all her five Australian Open finals appearances since 2003, while Sharapova won the tournament in 2008.
As of January 19, 2015, Williams retains her World No. 1 position, with Sharapova close behind, according to the Women's Tennis Association (WTA) rankings. The two players have met 18 times, with Sharapova's last victory in 2004 before being swept 15 consecutive times.