The 34-year-old downed the Greek World No.15, who is 14 years his junior, 4-6, 6-4, 6-4, to reach the last four, reports Efe news.
Seppi survived a pair of break points in the eighth game of the third set, which would have handed Tsitsipas a 5-3 lead and the chance to serve for the match.
But Seppi maintained control of proceedings with an aggressive approach to keep his rival at bay.
This is the third time Seppi has reached the semifinals of the tournament. He was knocked out at the penultimate stage in 2006 and 2013.
"I always play my best tennis in Australia. I really enjoy playing here. It's great to be back here and in another semifinals," said Seppi, according to a report on the official website of Sydney International.
"It was very important to start well in the second set. I think was good to have early break so I could play a little more aggressive. It worked out in the end," he said.
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