Djokovic, the 24-times Grand Slam champion, will play his fifth final in the tournament's history, looking to claim his 100th ATP title as well as his fifth Shanghai Masters crown.
Sinner secured the year-end number one spot in the ATP rankings with a 6-4, 7-5 semi-final victory over 30th-seeded Czech Tomas Machac in the Shanghai last four on Saturday.
The 23-year-old Italian top seed has won three of his last four match-ups with Djokovic but the Serbian was defiant.
"I'm in a great position to win the title, you know, against the best player in the world," the fourth seed said on Saturday.
The 37-year-old Serbian, who had complained of pain in his left knee on Friday, said it was no longer a concern.
"I won't be a favourite on the court, but hopefully I'll be able to come out physically fresh enough, you know, to challenge him for what may be the long match," Djokovic added.
It will be a rematch of this year’s Australian Open semi-final, where eventual champion Sinner ended Djokovic’s 33-match winning streak with a 6-1 6-2 6-7(6) 6-3 upset win.
Djokovic, who had committed 54 unforced errors, was stunned by Sinner's performance during the three-hour 26-minute battle in January but is confident he will prevail this time.
"I have to expect probably the toughest encounter of the tournament ... He knows my game, I know his game. We haven't played since Australia this year. I'm hoping for the best, it's going to take my highest level to win," he added.
