Rafael Nadal and Novak Djokovic will face each other in the final of the inaugural ATP Cup after winning epic three-set matches Saturday to steer Spain and Serbia into the decider.

World number one Nadal ground down pumped-up Australian Alex de Minaur to guide the Davis Cup champions through their semi-final while Djokovic battled past Russia's Daniil Medvedev.

Under the format of the innovative team event in Sydney, the top-ranked singles players from each country play each other, ensuring the two legends clash for a 55th time since their first showdown in 2006.

World number two Djokovic leads the head-to-heads 28-26, including beating his arch-rival in the Australian Open final last year.

Nadal outlasted De Minaur 4-6, 7-5, 6-1 after unflappable teammate Roberto Bautista Agut tamed Nick Kyrgios 6-1, 6-4. Djokovic had an equally tough time against impressive fifth-ranked Medvedev, coming through a top-draw contest 6-1, 5-7, 6-4 on the back of Dusan Lajovic beating Karen Khachanov 7-5, 7-6 (7/1).

"Alex was playing at a very high level and for me my energy was a little bit lower than usual. But it has been a very emotional evening and a pleasure playing here," said Nadal.

"We know it's going to be a super tough final (against Serbia)," he added. "Novak likes a lot to play here, he's had a lot of great results. So let's see. We have a good team too."

Sixteen-time Grand Slam winner Djokovic, who is targeting an eighth Australian Open title this month, had looked on track for a comfortable win against Medvedev after sailing through the opening set and breaking in the first game of the second.

"It was an exceptional match. Lots of rallies and very exhausting. Daniil Medvedev is one of the best players in the world and he showed today why," said Djokovic.

"He's difficult to break from the baseline, he's tall and has a good serve. This was the most difficult challenge I have had so far this year."