In the best match of the tournament so far, Murphy had to be close to his best to defeat dogged Higgins, who came so close to forcing a final frame decider after recovering deficits of 3-0 and 5-3.
But in the end it was Sale's World No 6 Murphy who went through to the final of snooker's most prestigious invitation event. He will battle Neil Robertson over 19 frames tomorrow in a contest between two players who had never previously been beyond the quarter-finals of the Masters. At stake is the trophy and a prize of £150,000.
Murphy, who will be playing in his first BBC final since the 2009 Betfred.com World Championship, will be aiming to join an elite group of just seven players who have won the World, UK and Masters titles.
He made a fast start tonight with breaks of 86 and 101 to win the first two frames. Four-time World Champion Higgins made 62 in the next before missing a tough long red to a baulk corner, and Murphy capitalised with a fantastic 69 clearance.
Wishaw's Higgins won two scrappy frames before Murphy fired a 122 to lead 4-2. Higgins took frame seven with a 59 and was first among the balls in the next, but missed an easy black off its spot on 17 and Murphy rattled in his third ton, an even 100. A run of 72 from Higgins kept his hopes alive as he closed to 5-4.
Murphy was first among the balls in the next and made 55 before running out of position. Higgins had a chance to clear up and got down to the final pink, which was close to a side cushion. He had to attempt a difficult long pot to the yellow pocket, but it wriggled in the jaws, rolled across the baulk cushion and left Murphy a simple pot to the opposite corner which won him the match.
Murphy said: "I thought I played very well tonight, I scored very well. Obviously I came second in the tactical department as you always do against John, but I was pleased when I did get my chances I scored heavily.
"John's absolute granite, hard as nails. He never gives up and that's why he's the champion he is. He never knows when he is beaten, and just keeps going for your throat. He is a tough man to play.
"It's not going any easier for me this event! First I beat the local lad (Martin Gould), then the World No 1 (Mark Selby), followed by the World Champion (Higgins) and now I've got a lad who is playing the best snooker of the season (Robertson). He's never lost a major ranking final, although this is an invitational event, but let's hope that changes tomorrow.
"For both of us it's new venue, new start. I can't wait for the action tomorrow and can't wait to get stuck in.
"I will be looking for the twelfth man as I'm in London, I'm English and I'm playing an Aussie, so I hope they will be on my side."
However Murphy declined to match Robertson's offer of a pint for anyone who comes to support him.
"I'll be getting a large coke, and 1500 straws!" he joked.
Higgins, who has yet to win a trophy this season, said: "It would have been a travesty if I had won that match, as I missed five or six easy balls. You just cannot miss those at this level, it's as simple as that. Shaun was hitting the ball really sweetly, so I couldn't believe I could get back to 5-5. I thought I was cueing all over the place, but I just dug in there and did my best.
"To get to the semi-final is a consolation, but when you're sitting here and you've lost, you're gutted. I only had four or five hours practice over Christmas and maybe that's what caught me out today.
"I would like to play well all the time but maybe I play my B game all the time now! I probably never play my A game and that's why you think my B game is good!"
Ball by ball scoring and results from tournaments