Gilles Simon of France and Spaniard Feliciano Lopez will also meet in today’s semi-finals as the tournament reaches its dramatic climax.
Federer won his evening match against Julien Benneteau of France, taking the first set at the tie-break, before demolishing his opponent in the second to finish with a 7-6 (7/4), 6-0 scoreline.
The third seed in Shanghai last faced Djokovic in the Wimbledon final, a game he lost 6-7(7/9), 6-4, 7-6(7/4), 5-7, 6-4.
The Swiss player is marginally ahead in their previous meetings, winning 18 times, compared to 17 for seven-time grand slam winner Djokovic
"I think every time we play against each other, it's a thriller," said Shanghai top seed Djokovic, ahead of the mouthwatering semi-final.
"It's really a big challenge for both of us. We need to take the best out of us. We need to bring our 'A game' in order to win."
Federer has been in stunning form this season, and is set to overtake world number two Rafael Nadal in the rankings on the back of his run in Shanghai.
Djokovic sends Ferrer packing
Djokovic marched into the semi-finals by overcoming David Ferrer 6-4, 6-2 as he vies for his third successive title.
The Serb broke his Spanish opponent's serve in the first game, but was given a scare as he was serving to take the first set with the scores at 5-4 in his favour.
Ferrer, who dumped out Britain's Andy Murray in the quarters, saved three set-points against the reigning champion in Shanghai before earning two break points.
But Djokovic snuffed out the challenge and finally closed the marathon 12 minute game at the net, pumping his fists with relief as the crowd roared.
He was more dominant in the second set, breaking fifth seed Ferrer again at his first attempt before gaining a 5-2 lead with his next break and closing out the match in one hour 24 minutes.
Meanwhile, Simon continued his great run in Shanghai, overwhelming Tomas Berdych in a scintillating final set to claim his second top-10 scalp in three days.
The world number 29 won 7-6 (7/4), 4-6, 6-0 to enter his second successive semi-final, after also making the last four in Tokyo last week where he lost to Milos Raonic.
"I feel my tennis is coming back from the last, I would say, two months," said Simon after his victory. "I'm finding a better rhythm. I also feel physically stronger and have had lesser injuries.”
The 29-year-old will fancy his chances against Lopez of Spain in the semi-finals.
The world number 21 beat Mikhail Youzhny of Russia 5-7, 6-4, 6-4 in a thrilling match between two thirty-something players.
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