Federer, who has not won a grand slam title since 2012 and lost five of his eight matches against Djokovic last year, is in arguably the better form, dropping just one set in five matches en route to his mouth-watering clash with the Serb.
Undisputed world number one Djokovic has dropped a set more than the Swiss but has never lost in the semi-finals of the tournament.
Djokovic came back strongly after making 100 unforced errors against Frenchman Gilles Simon in the fourth round to down number seven seed Kei Nishikori 6-3 6-2 6-4 in the quarter-finals.
The 44 matches between Djokovic and Federer is the second highest tally in the Open era, beaten only by the 47 between Djokovic and Rafa Nadal, and the Serb credits his two biggest rivals for his dominance of recent years.
"These two guys made me the player I am today. I think these rivalries have allowed me to grow ...and understand what it takes to be on the level that they are on," he said.
"Roger always makes you play your best. My best is what is going to be necessary to win against him."
Women's champion Serena Williams, bidding for her 22nd grand slam title, will have to overcome number four seed Agnieszka Radwanska in the first singles semi-final at the Rod Laver Arena.
The number one seed has buried fears about her form and fitness beneath a run of dominating performances. She has not lost a set so far and barely broke a sweat while vanquishing number five seed Maria Sharapova in the quarter-finals.
Poland's Radwanska beat Spain's Carla Suarez Navarro 6-1 6-3.
Williams is a fan of Radwanska, but their friendship will take a back seat for a few hours on Thursday.
"I know Aga really well. Whoever wins, we both deserve to be in the final. If she wins, I'll be very happy for her. I'm sure she'll feel the same way," Williams said.
(Reporting by Simon Jennings in Bengaluru; editing by John Stonestreet)
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