Williams sealed her seventh straight win over Sharapova with an emphatic slam on the new blue-clay court. Azarenka overcame a shaky start to beat French Open winner Li Na 3-6, 6-3, 6-3.
The ninth-ranked Williams opened strong, hitting six aces and earning two early breaks to take the first set.
Sharapova broke at love to even the score at 2-2 in the second set, but she quickly squandered her break with a costly sixth double-fault to fall behind for good.
Williams, who improved to 11-0 on clay this year, will face either U.S. Open champion Sam Stosur or Czech Lucie Hradecka.
After Azarenka struggled on serve early on, last year's runner-up found her stride and broke her Chinese opponent's first two service games of the second set en route to pulling even at a set each.
Azarenka, who has won four titles this season, then used her powerful groundstrokes to take a 4-0 lead in the decider before holding off Li's late charge.