Nadal broke Monfils in the fifth game of the second set. The top-ranked Spaniard withstood 10 aces by Monfils to earn his first two-set win this week. Nadal lost to Monfils in the quarterfinals at Doha last month for his only loss of the year.
Now, two weeks after winning his first Australian Open and sixth Grand Slam singles title, Nadal will play for his 33rd career title on Sunday.
Murray overcame a slight injury to his right foot to rout two-time champion Mario Ancic of Croatia 6-1, 6-1 in the earlier semifinal.
Nadal is 5-1 against Murray, but the Scotsman won their last clash in the U.S. Open semifinals.
"Our matches are usually guaranteed to be a spectacle," the second-seeded Murray said.
It will be first Rotterdam final between the top two seeds since 1984, but Ivan Lendl and Jimmy Connors didn't play because of a bomb scare.
Murray broke serve in the second game of the first set after running the score to 0-40. He then then held and broke again in the sixth game.
Ancic was broken in the first game of the second set. He had a single break point in the second game, but Murray evened the score and went on to win with an ace. Ancic surrendered the following game as well, netting a smash on the first of three break points against him.
A telling statistic was points won on first return of serve -- four of 26 for Ancic and 12 of 22 for Murray.