The Spaniard, chasing a record-extending 13th triumph at Roland Garros, will meet the world No 1 for the seventh time at Roland Garros, having beaten him six times out of seven, including twice in the two finals they played.
The 34-year-old Nadal, now undefeated in 13 French Open semi-finals, once again relied on his massive forehand to notch up his 10th win in 11 encounters with Schwartzman on Friday, who beat him at the Italian Open last month.
Nadal, who advanced into the Paris final without dropping a set for the first time since 2017, will equal Roger Federer's men's singles record of winning 20 majors if he triumphs on Sunday.
Schwartzman, the 12th seed, kept Nadal on court for over three hours but managed only 24 winners in the contest.
"With these conditions it's very difficult, and it's still incredible to be in the final again. Thanks to my team, my family. It's a beautiful moment for me," said Nadal, who has now progressed to the final without losing a set for the sixth time.
All signs pointed to a tight encounter and a 14-minute opening game confirmed that Nadal would not have it easy in chillier conditions than usual, with the tournament having been postponed from its usual May-June spot amid the Covid-19 crisis.
The scoreline belied the intensity of the match, but Schwartzman missed too many opportunities to shake Nadal's confidence, converting only three of 12 break points.
Nadal, who now has a mind-bogging 99-2 win-loss record at Roland Garros, broke six times from nine chances, raising his level under pressure.
In the second set, he lost only four points on serve against one of the world's best returners.
Nadal broke early in the third set and Schwartzman, looking increasingly frustrated, seemed on the verge of collapse but the Argentine fought back to send the set into a tiebreak.
Nadal, who also produced an outstanding defensive performance, won a quick exchange at the net to move 2-0 up and never looked back.
Schwartzman, who was playing his maiden Grand Slam semi-final, found the net with a return on match point to allow Nadal into his 28th major final, his ninth against Serbia's Djokovic. They have won four each.
"The only thing I know is to play against Novak, I need to play my best. Without playing my best tennis, the situation is very difficult," said Nadal.
"Obviously the conditions are different than the ones that we are used to playing in May and June," Djokovic told reporters after beating Stefanos Tsitsipas 6-3 6-2 5-7 4-6 6-1 in four hours on Friday.
"I think that could be a better chance for me, obviously the ball not bouncing as high over the shoulder as he likes it usually. I mean, look, regardless of the conditions, he's still there, he's Rafa, he's in the finals, we're playing on clay."
Had it not been for Djokovic's default at the US Open for striking a line judge with a ball swatted away in frustration during a fourth round match against Pablo Carreno Busta, the Serbian might have been starting Sunday's showdown with 18 Grand Slam titles, one behind Nadal and two short of Federer.
Victory would see him close the gap but defeat would leave him three shy of both of them in the race for 'greatest of all time' status. The stakes are huge, but Djokovic says it is not the biggest match he has played in his career.
"Finals of a Grand Slam is always huge. But I don't think it's the biggest match that I have ever played in my life. I think there were some bigger ones.
"In terms of importance, I mean, if I have to compare, even though I don't like, probably the first Wimbledon final that I actually played against him (in 2011). Wimbledon was always the one that I wanted to win as a kid and dreamed of winning.
"That's probably the one that stands out. And the French Open 2016 against Andy Murray here. Every French Open final that I played was the match of my life before I actually won it.
"This is the (Grand Slam) that I won the least, so of course I am extremely motivated to try to get my hands on another one."
Djokovic said he will be firing on all cylinders on Sunday.
"I'm not feeling exhausted physically so much after tonight's match," he said. "It was a great battle. But I feel fine. I think a day and a half will be plenty of time for me to recover. I'm looking forward to a great battle with Rafa."
