The seven-time Grand Slam-winner edged past Vinci in three sets that saw the Italian get a match point before eventually losing in a tie break.
Williams looked comfortable going into the third set, securing a 4-1 lead over Vinci.
But the shock US Open finalist pushed back, evening the score before finally falling to the American veteran 5-7, 6-2, 7-6 (7/4).
It was Vinci's second consecutive semi-final meet against a member of the Williams family, after downing world number one Serena in the US Open, an upset that denied her a calendar-year Grand Slam and a record-equalling 22nd major title.
Venus will now meet Wimbledon finalist Garbine Muguruza or Angelique Kerber in the final.