Nishikori was on the verge of losing the match after being a set down and facing two match points at 4-5 in the second.
However, he held his serve with a perfectly timed lob and an ace to level the score 5-5 in the second set and later wrap it up in the tie break.
Nishikori maintained the momentum in the third to win the match against the world no 37 who smashed 20 aces in the match.
“It's never easy to save two match points – I was happy to get through this tight moment. I got more comfortable and played a good match,” Nishikori said.
Murray faces Tsonga for Vienna title
World no 2 Andy Murray reached the final of Vienna Masters without hitting a ball after David Ferrer withdrew from their semi-final encounter on Saturday with a leg injury.
The 2016 Wimbledon and Olympic champion will now face Jo-Wilfried Tsonga for the title after the Frenchman saved a match point in a thrilling 5-7, 7-5, 7-6 (8/6) victory over Ivo Karlovic.
Murray will be doubly motivated to claim the title, as wins in the Austrian capital and in next week's Paris Masters gives him a shot at toppling Novak Djokovic from the top spot in world ranking.
Of course, even if Murray wins both the tournaments, he can become the world no 1 only if Djokovic loses before the final in the French capital.
Tsonga has a daunting task to stop Murray from claiming the title. Murray leads their head-to-head 13-2.