Ivanovic failed to convert 18 break points and let slip a 5-1 lead in the first set before finally taking in on the tiebreaker.
The former-top ranked Serb had two break points in the fifth game of the second set and five more in the seventh before falling away.
The fourth-seeded Hantuchova handled the important points better, as well as two rain delays, as she reached her 12th WTA Tour final.
"I like playing on grass, and I've had a lot of experience on it, and that certainly helps you to do the right things", Hantuchova said.
Hantuchova will face Sabine Lisicki of Germany in Sunday's final, which has been brought forward by three hours to 0900 GMT because of expected rain. Lisicki beat third-seeded Peng Shuai 6-3, 6-1 in the second semifinal.
Ivanovic, who clubbed 17 aces as well as hitting some powerful forehands, looked almost too disappointed to contest the final point, and the result is a blow to hopes that she can use the grass-court season to lift her fortunes.
The 19th-ranked Ivanovic, who won the 2008 French Open, was looking to reach her first final since October.
"I don't know how many break points I had, but I still felt positive coming out for the third set," Ivanovic said. "It was only in the last couple of games that I didn't have the intensity I had previously. My mind was wandering and things happen very fast on grass.
"But it was the first time I have played four matches in a row for a long time, and that's something positive I can take into next week." Lisicki, a 21-year-old German who reached the Wimbledon quarterfinals two years ago, outplayed the third-seeded Peng, ensuring that there will not be a Chinese champion in Birmingham for a second successive year. Li Na, the French Open champion, won last year's title.
Lisicki is on her way back after spending seven weeks on crutches last year with an ankle injury.
"It's nearly impossible to put into words how happy I am," she said. "I had to start again from zero because the leg had no muscles after all that time. That made it tough, but it makes it all the nicer now." If Lisicki wins again it will not only give her the second title of her career but could increase her chances of being awarded one of the two remaining Wimbledon wild cards.