World number three Djokovic, who beat world number one Roger Federer in the Basel final last week, will face local favourite Gael Monfils or Czech Radek Stepanek in the final of the last event of the regular season on Sunday.
Spaniard Nadal, who has not won a title since beating Djokovic in the Rome Masters final last May, will now prepare for the November 22-29 World Tour Finals in London featuring the world's top eight players.
The first set was tight until Djokovic earned three break points in the sixth game, firing a backhand winner on the first.
Nadal kept struggling on his serve and went on to offer his opponent three set points with an unforced error two games later. Djokovic hit a return winner on the first, wrapping up the set. The 22-year-old Serb stayed on top in the second set, winning the first two games to love and breaking Nadal in the second with a forehand winner.
Nadal, who won the French Open four times on the other side but never this indoor event, could not recover and a near-faultless Djokovic remained in charge until sealing victory with a superb forehand on the first match point after just 76 minutes. On Friday, Gael Monfils, seeded 15th, later made sure there would be a French presence in the last four by recovering from a set down to oust 12th seed Marin Cilic of Croatia with a 3-6, 6-4, 6-4 win.
The gifted but erratic Monfils worried his fans at first with clumsy errors but then stepped up a gear and thrilled a raucous 14,000 crowd with astonishing winners to set up a semi-final against Radek Stepanek.
Czech Stepanek qualified the easy way when Juan Martin del Potro, who was hampered by an abdominal strain and was trailing 4-0, retired.
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