The 22-year-old, beaten by Angelique Kerber in the 2018 showpiece, gave the Sydney crowd plenty to cheer in a thrilling 6-7 (4-7) 6-4 7-5 triumph over Kiki Bertens.
Victory on home soil would cap a stunning week for Barty, who kicked off the tournament with a shock win over world number one Simona Halep.
But to claim a fourth WTA Tour title she must overcome Kvitova, who prevailed 6-1 6-2 in a rain-delayed clash with Aliaksandra Sasnovich.
The two-time grand slam champion needed a little over an hour to gain a measure of revenge for her loss to Sasnovich in the first round of last year’s Wimbledon, when Kvitova was the pre-tournament favourite.
In Hobart, Slovakia’s Anna Karolina Schmiedlova defeated Belinda Bencic 7-6 (7-2) 4-6 6-2, setting up a final with fellow unseeded player Sofia Kenin.
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