The diminutive Italian had knocked out multiple grand slam champions Coco Gauff and Barbora Krejcikova to advance to the last four in a timely boost for her US Open campaign.
Paolini made a strong start but Kudermetova stormed back from 5-3 down in the second set to force a decider, in which the Italian seventh seed went on to close it out with a love hold.
"I said to myself after losing the tiebreak that I have to step back on court, be in the present and don't think about what happened," said Paolini.
"I did my best and it did not work in the second set but you have to keep going.
"And that was the key, to forget and go back and fight and stay in the present."
The 29-year-old is the oldest woman to reach WTA 1000 finals on multiple surfaces in a single season since Serena Williams nine years ago.
Paolini will enter the decider looking to snap a five-match losing streak against Swiatek, in their first match since the Bad Homburg Open semi-final in Germany in June.
Earlier on Sunday, third seed Swiatek beat Elena Rybakina 7-5 6-3 having lost at the penultimate stage in each of the last two years in Cincinnati.
The Pole had her hands full in the early stages of the 98-minute match but took advantage of a sudden dip in Rybakina's form to win four consecutive games and wrap up the first set before easing through the second.
"That was a tough match. At the beginning the level was pretty crazy, we played so fast that sometimes we couldn't even run to the second ball because we played so fast," said six-time grand slam champion Swiatek, who has not lost a set all tournament.
"But I was there to play with intensity and good quality and I am super happy with the performance. I served much better so for sure it helped and I wouldn't change anything."
Ninth seed Rybakina used a cross-court forehand that caught the line for a break and then held for a 5-3 lead in the first set but a laser-focused Swiatek came back from the precipice and attacked the Kazakh's serve to draw level at 5-5.
From there, the Wimbledon champion held serve before wrapping up the opener when she broke for a second time after a Rybakina backhand attempt came up well short.
Rybakina, who enjoyed a swift victory over world No.1 Aryna Sabalenka in semis, was broken for a third time early in the second set after a backhand error.
Swiatek faced some push-back from Rybakina three games later but dug deep to recover and reach 5-2, before wrapping it up on serve when Rybakina sent a forehand return long.
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