The 23rd seed, who knocked out defending champion Serena Williams in the fourth round, proved too strong for her Polish opponent who was runner-up at the All England Club last year.
Lisicki wrapped up the first set in 33 minutes and, brimming with confidence, broke again in the opening game of the second.
Radwanska, however, immediately broke back and she moved 3-1 ahead as Lisicki's concentration faltered.
The German kept going for her shots and was rewarded with another break in the next game but Radwanska had the momentum and took the set.
Radwanska led 3-0 in the decider but Lisicki suddenly rediscovered her form, fighting back to level at 3-3 and breaking again to lead 5-4.
She served for the match but got broken but kept her wits about her, ending a dramatic contest with a forehand winner after two hours and 18 minutes.
Lisicki will play 15th seed Marion Bartoli in the final on Saturday.
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