Nalbandian is bidding to be the first back-to-back winner of the Paris Masters
Defending champion David Nalbandian will play Jo-Wilfried Tsonga in the Paris Masters final with the winner securing a place at the Masters Cup.
Nalbandian won 20 of the opening 23 points as he stormed to the first set but Davydenko battled back and broke to win the second set and level the match.
But two errors in the seventh game of the final set cost the Russian his serve, and the match 6-1 5-7 6-4.
Tsonga secured his place in the final with a 6-4 6-3 win over James Blake.
It will be a first appearance in a Masters Series final for Tsonga who is bidding to become the first home winner since Sebastien Grosjean in 2001.
Blake held his opening service game, but was broken to love in his second as Tsonga took charge of the net and the opening set.
The 23-year-old continued to overpower his opponent in the second set and broke Blake in the first and ninth games to end the American's hopes of securing automatic qualification to the season-ending Masters Cup in Shanghai later this month.
The result also made sure of qualification for seventh-ranked Juan Martin del Potro and means that the winner of Sunday's final between Nalbandian and Tsonga will complete the eight-man line-up in China.
Nalbandian, who is aiming to be the first man to win back-to-back Masters titles in Paris, was in stunning form early on as he raced to a double break and 5-0 first-set lead inside 15 minutes.
Davydenko lifted his game and the pair traded breaks midway through the second set but the Russian made a string of unforced errors and could not take complete charge.
However, Nalbandian's level had dropped and he lost four consecutive points on his own serve to drop the set.
The deciding set was going with serve until Davydenko made a couple of more errors to gift Nalbandian the break and he took full advantage to serve out for the victory.