Yastremska reached her first career final after defeating 40th-ranked Zhang Shuai of China 7-5, 6-4 in the other semifinal.
Zhang, who has won two career WTA singles titles, will be favourite to win against 18-year-old Yastremska, now ranked 102.
She then clawed her way back from a 1-4 deficit, with Muguruza - appearing exhausted and out of ideas by the end of the match - losing her final service game with two unforced errors. Yastremska will receive $163 thousand for the victory.
Gavrilova, 24, said she was exhausted after two three-set matches in the earlier rounds and said she suffered a painful knee during the pre-game warm-up which required heavy strapping.
"I thought it would be more hard", she said.
The result is the latest in a string of firsts for the 26-year-old this fall, as she reached her second WTA final in her past four tournaments.
The Hong Kong quarter-final was a rematch of August's US Open third round contest, which the Ukrainian won in straight sets, but here the tables were turned with Svitolina receiving a tennis masterclass from her opponent.
The world number 24 had already seen off Elina Svitolina just hours earlier in a rain-delayed quarter final - Wang's highest-ranked top 10 scalp this year - despite admitting she had been shaking with nerves ahead of the restarted match. "I just went for it", Wang said at the close of her marathon day.
"I had nothing to lose against her - she's a very good player", Wang said.
Svitolina, who is now looking for a tournament wild card to boost her Singapore chances, is also in the hunt for a new fitness and main coach for next season.
China's top-ranked player is making a run at the top 20.
The Ukrainian offered glimpses of fantastic attacking tennis to beat Kristina Kucova 7-6 (6) 6-2, to progress to her first Tour-level semifinal. "I want to repeat it all from the first match".