It marks the re-birth of one of the fiercest rivalries in modern tennis on a stage where the stakes could not be higher.
Despite a long rivalry stretching back over a decade, Saturday's clash is their first meeting in a Grand Slam final.
"I think it'll be a defining match for both of us," said world number one Williams.
The pair have played each other 13 times with Williams winning seven and Henin six and both have held the number one ranking.
Their individual records already show they are two of the greatest players the game has seen. Williams has won 11 Grand Slam titles and Henin seven. Williams has pocketed almost $30 million in prize money and the Belgian around $20 million.
In many ways, the pair could hardly be any different -- Williams is an imposing figure who uses her incredible physique and supreme confidence to overpower her opponents.
Henin is smaller, quietly spoken but possesses brilliant technique. They also bear striking similarities, driven by their fierce determination to succeed.
The players clashed at the 2003 French Open when Williams accused the Belgian of lying after she refused to allow her to replay a contentious point. They have not exactly kissed and made up but Henin said they had resolved their differences and buried the past.
"It's far away now, it's a long time," the 27-year-old said. "We exchanged a few words here...so I'm sure there's no problem about that between the two of us.
"We both want to win. We both respect the fact that the other gave a lot to the game and that's very good."
Williams is the favourite to win the Melbourne Park final. She has already won the Australian Open four times and warmed up for the event by teaming up with her sister Venus to successfully defend the doubles title on Friday.
The 28-year-old struggled to win her quarterfinal against Victoria Azarenka and then her semifinal with Li Na, but fought her way out of trouble each time and is relishing the prospect of facing her old sparring partner.
"I definitely think of her as a rival. We bring out the best game in each other," Williams said. "We both just play our hearts out. That's what creates a good rivalry."
Their rivalry was put on hold for two years after Henin quit the sport in 2008, fed up with the relentless grind of playing, training and travel. She only made her comeback this month and has exceeded her wildest expectations by reaching the final.
The odds may be stacked against her but she has not given up hope of winning after her fellow Belgian Kim Clijsters won last year's US Open when she too was in the early stages of a comeback.
Henin won the Australian Open in 2004 and was runner-up to Amelie Mauresmo in 2006 when she threw in the towel because she was feeling ill. "It's a special occasion but I see it as an opportunity to play the number one player in the world in a Grand Slam final," said Henin.
"It's more than a dream for me. It's a perfect challenge and I love this kind of situation.
"The one who will want it more will win probably. I know I'll have to be aggressive generally and use my qualities. I have the determination and the ambition, of course," she said.