Garcia of France, beat the former US Open finalist 7-6 (7-5), 7-5 in 1hr 52min on Rod Laver Arena to set up a meeting with Laura Siegemund of Germany.
"I'm pleased because she was pretty much up all the time and winning her service games very easily," said Garcia of the world number 40 from Canada.
At the end of a high-quality first set which saw one service break each, Fernandez upped a gear at the start of the tiebreak, stretching out to a 4-0 lead.
But a double fault at 4-1 gave Garcia a sniff and she capitalised, fighting back to 6-5 and sealing the set with an ace.
Neither could make inroads early in the second set with Garcia unable to maintain pressure on Fernandez, who lost the 2021 Flushing Meadows final to Emma Raducanu.
"On the serve she was using the slice very well," said Garcia. "So I had to make a lot of adjustments and the winner was going to be the one who was more aggressive inside the court."
Then at 5-5, Fernandez finally cracked as Garcia finally broke and then served out for the match, celebrating with a trademark leap of joy.
Garcia roared back into the top five last year after a tough couple of years where injuries caused her form to desert her.
Since June 2022 Garcia has won 38 Tour-level matches including titles on all three surfaces - clay, grass and hard courts - to climb back from 74th in the world at the start of last season.
Her finest moment came in winning the season-ending WTA Tour Finals in Fort Worth.
