Wawrinka swept past Spain's Pablo Carreno Busta, the world number 23, 6-3 6-2 in Saturday's opening semi-final.
Federer, the 18-time Grand Slam singles winner, who has won the event four times, had few problems joining him in the decider.
The world number 10 defeated the American world number 18 Jack Sock 6-1 7-6 (7-4).
Federer came into the match after his scheduled quarter-final opponent Nick Kyrgios pulled out because of illness, and he was imperious from the start.
He needed just 21 minutes to wrap up the first set, with Sock requiring treatment from the trainer midway through it.
Sock made more of a match of it in the second set but Federer always held the advantage and capitalised on some unforced errors from Sock in the tie-break to reach his seventh final in the Californian desert.
Wawrinka never faced a break point in his encounter with Carreno Busta, who was playing in his first ATP Masters 1000 semi-final.
Three-time Grand Slam winner Wawrinka, 31, will be playing his first Indian Wells final, having lost in last year's semi-finals.
The Swiss pair have met 22 times over their careers with Wawrinka only winning three times, and never on a hard court.
Australian Open champion Roger Federer will face compatriot Stan Wawrinka in an all-Swiss final at Indian Wells.