Melzer, the top-ranked Austrian who has climbed to a career-high 55th in the world, fell to Malisse, 3-6, 6-3, 6-3. Melzer was trying to become the first Austrian to win this title since Thomas Muster in 1995 and the first to appear in the final since Markus Hipfl three years ago.
Serving at 40-0 in the seventh game of the third set, Melzer lost the next five points to concede the break. He lost his serve again in the ninth game to end the match.
Malisse moved into his fifth career final, but still is seeking his first victory.
Eighth-seeded Italian Filippo Volandri ousted No. 6 David Sanchez of Spain, 6-1, 4-6, 6-4, in a rain-interrupted match. He has won both career meetings with Sanchez.