The Dane had needed to reach the semi-finals at Melbourne Park to have a chance of retaining the number one ranking, and is now projected by the WTA to slip to at least number three at the conclusion of the tournament.
Wozniacki had been world number one since October 11, 2010, though she lost it to Clijsters for one week last February, before reclaiming it again on February 21.
She had held top spot for a total of 67 weeks but found herself having its validity questioned, most recently by 18-times grand slam winner Martina Navratilova, because she had not won any of the four grand slam titles.
World number two Petra Kvitova, number three Azarenka and number four Maria Sharapova all have a chance of taking the top ranking, depending on how they finish the tournament.
Azarenka was the first woman into the semi-finals after the Belarussian fought off Polish eighth seed Agnieszka Radwanska 6-7 6-0 6-2 in the first match on Rod Laver Arena.
Wozniacki had lost her two previous meetings with Clijsters, in the 2009 U.S. Open final and the 2010 WTA Championships and once again found the four-times grand slam winner in rampant form, unable to match the Belgian's power and precision.
Clijsters had rolled her left ankle badly in her fourth round match against Li Na before she came back from a set down and fought off four match points to make the quarter-finals. The 28-year-old Belgian, however, did not appear to be suffering any ill-effects from that fall, scampering around court in temperatures approaching 34 degrees Celsius and able to stretch when recovering shots out wide.
To her credit, Wozniacki had looked down and out at 5-2 in the second set but drew on all of her reserves to fight back and take it to a tiebreak.
The comeback, however, only served to delay the inevitable as the Belgian took the decider 7-4, sealing victory on her first match point with a forehand volley.
"It definitely didn't feel like being up a set and 5-2," Clijsters said in a courtside interview.
"I had to work really hard for it.
"I think she changed up her tactics a little bit and became a little more aggressive... I was happy to get through and not go to a three-setter because it's so hot."
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