The former world number one will face off for the title, at the last major tune-up prior to the US Open, when she plays Serena Williams.
The American top seed Williams moved within one win of a second pre-Open hardcourt title as she beat Caroline Wozniacki 2-6 6-2 6-4.
Ivanovic led by a set and 5-2 but fell victim to nerves yesterday as the scrambling Sharapova, a five-time grand slam champion and fellow former number one, fought back. Sharapova levelled the sets at one each as she clinched the second set with an ace.
Sharapova's frustration level appeared to grow as the Russian struggled to get a grip on a game which produced seven double-faults in the third set.
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"There were certainly a lot of ups and downs. I wasn't happy with that."
Ivanovic saved a pair of Sharapova match points and finally held for five-all.