The world no.1 beat no.6 seed 7-6 (5), 6-7 (4), 6-3, 6-0 to win an eighth major, joining Jimmy Connors, Ivan Lendl and Andre Agassi in fifth place on the Open Era major titles list.
Novak advanced to his fifth final at Melbourne Park as he fought past no.4 seed and defending champion Stan Wawrinka 7-6 (1), 3-6, 6-3, 4-6, 6-0 on Friday. He faces Murray for title.
World no.1 progressed to his fifth semi-finals in Melbourne with a 7-6 (5) 6-4 6-2 victory over Milos Raonic.
Nole beat Gilles Muller 6-4, 7-5, 7-5 to reach the Australian Open quarter-finals for the eighth time.
The top seed advanced into the Australian Open fourth round with a 7-6 (8), 6-3, 6-4 win over no.31 seed Fernando Verdasco on Saturday.
Novak ousted world no.88 Andrey Kuznetsov in straight sets 6-0, 6-1, 6-4 in one hour and 24 minutes on Thursday to ease into the third round in Melbourne.
World no.1 opened his Australian Open campaign with a 6-3, 6-2, 6-4 win over qualifier from Slovenia Aljaz Bedene (116) on Tuesday.
Novak is a top seed. He will start his bid for an eighth Grand Slam title against Aljaz Bedene (SLO, Q) on Tuesday.
Novak features in two of top 5 Grand Slam matches of the year.
No.10 seed Kei Nishikori upset the top seed in four sets – 6-4, 1-6, 7-6 (4), 6-3, becoming the first Asian man to reach a Grand Slam singles final.