Nadal, a two-time Madrid champion, needed 77 minutes to oust fellow Spaniard Pablo Andujar 6-0, 6-4 in their semifinal match.
The former world No. 1 won all but nine of the 34 points played in the first set as well as the final three games in the second to secure his slot in the finals.
The Spanish star will be making his seventh finals appearance in as many 2013 events, continuing an impressive recovery after missing eight months with a knee injury.
Switzerland's Wawrinka, meanwhile, needed three sets to get past sixth-seeded Czech Tomas Berdych 6-3, 4-6, 6-4 in the day's other semifinal match.
He remained on a hot streak after winning a clay-court title last week in Portugal.