Serena Williams overcame a spirited challenge from teenager Madison Keys to become the oldest Australian Open finalist in the open era.

Williams recovered from a break down in the opening set and saw Keys save seven match points before eventually securing a 7-6 (7/5), 6-2 win in an hour and 24 minutes on Rod Laver Arena.

The world number one will face second seed Maria Sharapova in tomorrow's final after the Russian defeated compatriot Ekaterina Makarova in straight sets. Williams has a 16-2 record against Sharapova, winning the last 15 matches in succession.

"I'm really excited to be in the final again," said the 33-year-old Williams, who is three months older than the previous oldest finalist, 1988 runner-up Chris Evert. "I didn't come here with that expectation so it's really exciting.

"I didn't play well, I don't think, at the Hopman Cup (losing to Agnieszka Radwanska in the final of the team event). I was so off. I felt like I wasn't moving well. I just wasn't feeling great on the court.

"It's also been so long since I've even been in a final here (since winning her last title in 2010)."

Williams revealed she was benefiting from a new relaxed attitude after becoming caught up in winning her 18th grand slam title, matching the totals of Evert and Martina Navratilova and four behind record holder Steffi Graf.

"It started last year because I was so hyped on getting to 18 and I lost every grand slam early," she said. "I didn't make it to any quarter-finals. Then after Wimbledon I decided to not necessarily not care, but just relax. It all kind of came back for me after that (winning the US Open) and I think it's been working."

Williams was full of praise for 19-year-old Keys, who knocked elder sister Venus out in the quarter-finals and had never previously gone beyond the third round in a grand slam.

"She is obviously a great player," Serena added. "I think she is going to be winning this title very soon and lots of other grand slams. I'm really happy to see her do so well and be such a great sport at the same time.

"She pushed me really hard in that first set and I had to really dig deep mentally to get through that."

"I think this week has definitely shown to me, more than anyone else, that I can play the top players and I can do well against them," Keys said. "I can play the number one player in the world in a pretty close match.

"So I think for me that's inspiration for every time I'm on a practice court to keep working, keep getting better so I can have more and more weeks like that."

Sharapova had earlier made it six wins out of six against 10th seed Makarova, winning 6-3 6-2 in an hour and 27 minutes.

Since saving two match points in her second round match with Alexandra Panova, Sharapova has not dropped a set and has lost just 15 games as she seeks to win a sixth grand slam singles title.

"When you start off the tournament you take it a match at a time and it's been kind of a strange road to get to the final, but I am here and really, really happy," the 27-year-old said.

"Playing another Russian and someone who was not necessarily the favourite coming into the match, I knew she would come out and play really well and I think I was ready for that, stood my ground and competed well.

"I felt that I've had really good matches and a good record here in Australia, ever since the junior days and been able to carry it over as a professional. I've had many great memories on Rod Laver Arena. I've hopefully set myself up for another one."

Makarova, who also made the semi-finals of the US Open last year, added: "Of course I'm a little bit upset that I lost but she's a great champion and she has been so many times in this situation. I was a little bit too nervous maybe and I took so much experience from this match.

"I hope I will finally take the next step. It was a great two grand slams for me. I'm so happy how I'm playing, how I'm doing in these tournaments. I've been so many times before in quarter-finals, so now I need to be used to being in semis."