Shabana, whose four world titles have only been exceeded by the two Pakistani greats, Jansher and Jahangir Khan, could not match the movement of the tenacious Englishman here and nor could he convert the crucial game balls he had at 10-9 in both the second and third games.
The 31-year-old from Cairo played more of the inventive squash in a fine match with a fascinating contrast of styles, but was slightly below the physical peak of his title-winning years.
It was an important factor in a 11-6, 12-10, 12-10 defeat.
At the end Shabana smashed his racket violently over his knee in frustration -- though his was never a bad-tempered performance and he remains one of the sport's most popular players.
"There was absolutely nothing in it," said the top-seeded Matthew, who has won two British Open titles and took two Commonwealth gold medals at Delhi in October.
"I got off to a good start, and when that happens it doesn't matter who you play against -- you have a comfort zone," the Yorkshireman added.
"But he's an unbelievable player. He was killing me on the forehand side. I said to him afterwards, 'You are a legend.'"
Shabana led 7-2 in the second game and 9-7 in the third, and although he was breathing heavily, he was playing well enough to haul the deficit back.
But Matthew kept the ball tight, and the pace high, and attacked sensibly when there was a chance.
He saved a game point at 10-9 in the second game with a cleverly directed drive from the front court straight at Shabana's body, forcing a volleying error.
And he saved another at 10-9 in the second when his steepling lob forced Shabana to dump an overhead into the tin.
Matthew finished the match with three or four dramatic retrieves which set up a front court opportunity that he took with a fast trickle round the forehand side wall to the front, leaving Shabana stranded.
His opponent in the final will be his compatriot James Willstrop, who won 6-11, 14-12, 11-4, 11-8 against a third member of England's 2007 world team title-winning squad, Peter Barker.
Willstrop had to save a game ball at 11-12 in the second game.
"If I had gone two down against so physical a player as Pete I would have been in big trouble," Willstrop said.
Willstrop showed that his skill is equal to anyone's in the game, but the contest lasted an hour and a half. There seems little doubt who will be the fresher finalist.