The World No. 3 Indian, who reached the semifinals of the event in 2010 and 2013, defeated the unseeded Sun 21-13 21-13 in a match that lasted for 50 minutes at the Barclaycard Arena.
Saina is now just one step away from joining Indian legends Prakash Padukone (1980) and P Gopichand (2001) who have bagged the prestigious title in the past.
The 24-year-old will face the winner of the other semifinal between seventh seeded Tai Tzu Ying of Chinese Taipei and Spain's Carolina Marin tomorrow.
The Indian had come into the match with a 1-1 record against Sun, who had defeated her during the 2013 China Open but all that didn't matter as Saina stamped her authority with her wide repertoire of stroke.
Saina, who had beaten Sun at the Australian Open in June last year, lagged 0-2 behind early on as Sun showed her intent to move to 4-1.
After the interval, Saina changed her tactics and was soon rewarded with a couple points as she stretched her lead to 16-12.
The Indian soon made it 19-13. An unforced error from Sun gave Saina the advantage of seven game points and the Hyderabadi sealed it when the Chinese hit the shuttle hard and long.
In the second game, Sun once again opened up a narrow 3-2 lead but Saina kept drawing her to the net, where she looked comfortable.
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