The Englishman led for much of the semi-final and eventually finished off the defending champion in a sudden death leg to claim a remarkable 6-5 victory.
Cross, in his first season as a professional, is now on the verge of a maiden world title.
But Taylor is the man standing in his way after the 16-time champion ensured he would make his swansong in the New Year’s Day showpiece with a 6-1 win over Jamie Lewis.
In a contest that finished after midnight, Van Gerwen was always chasing Cross as the players traded sets, until nudging ahead for the first time at 5-4.
Cross took advantage of uncharacteristically poor finishing from the Dutchman to set up a decider that followed the pattern of the match.
Both players squandered opportunities to win it before Cross held his nerve in sudden death.
Cross told Sky Sports Darts: “Words can’t explain it. Don’t get me wrong I played well, but the crowd helped me, they really did. They got on Michael’s back and that’s why I won.
“At points I felt inexperienced, I really did, but I still got through.
“I will come out (in the final) and want to win.
“He (Taylor) is my favourite player actually. He was dominant and now he’s leaving, it’s going to be special for him but at the same time I’ve got to do my own job and do what I need to do to win that game.
“I never expected this, it’s amazing, absolutely amazing. I never expected this rise, I really didn’t.
“I’m just a working boy, I come from a normal household and don’t get me wrong, I believe in my own ability and that’s only why I got here.”
Earlier, provisional-round qualifier Lewis missed several darts at key stages as the experience of Taylor reaped dividends.
The Stoke player, who has won this title 14 times and the BDO world title twice, will retire after this tournament.
Taylor started strongly and broke Lewis’ throw in the first leg, then led 2-0, but the Welshman hit back and won the next three legs to claim the first set with a double 16 finish.
The second set was closely matched but Taylor edged past his 26-year-old opponent after he missed a double 13 finish to level at 1-1.
The third set also went to a fifth leg thanks to a 100 checkout from Taylor, with three missed darts from Lewis then allowing him a shot at double 20 to move 2-1 ahead in sets, which he duly took.
Lewis was left kicking himself after he squandered yet more darts to let Taylor back in to claim the fourth set and a 3-1 lead before the 57-year-old came out on top in the next.
Taylor’s experience under pressure then saw him clinch the two more needed sets with relative ease.
“I’m over the moon. The first two or three sets I didn’t know where I was. I was struggling, I couldn’t put three darts together,” Taylor said.
“Now I’m retiring, he (Lewis) is the one to watch for, trust me, because he’s a lovely player, he’s got a cracking family behind him and he’s got no airs and graces, just gets on with his job. I can’t say enough about him.”