Goffin needed 10 minutes to hold for 5-1 as Thiem displayed some signs of resistance, only to see four more break points go begging.
Federer booked his semi-final spot, a record 14th at the tournament, with a match to spare after wins over Jack Sock and Alexander Zverev.
"I have nothing to lose", Goffin said.
"I've never found a key to beat Roger".
Roger Federer has revealed that his relationship with tennis has changed over the years as he has become calmer while appreciating the more important facets of the game such as winning.
It looked as though he was set for his second heavy beating of the week, having got only two games against Dimitrov in their group clash, but Goffin is made of sterner stuff.More news: Chris Coleman set for Sunderland job after resigning from Wales
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Dimitrov will play Goffin in the final of the season-ending showpiece.
Goffin consolidated his lead to take the match into a decider that hardly looked possible a short while before.
Dimitrov topped the Pete Sampras group after an impressive week that included a tight three-set win against Austria's Dominic Thiem, a thumping victory against Goffin, whom he will play for the second time in a week on Sunday - live on Sky Sports Arena from 3.30pm - and an electrifying performance against Pablo Carreno Busta on Friday night.
Consecutive aces gave him a 30-0 cushion before he buried a nervy forehand in the net.
"I think in the beginning I was slightly overaggressive in the first set on some crucial points rather than maybe being patient".
But after qualifying for the ATP Finals for the first time having climbed to a career-high sixth in the world, Dimitrov is starting to revel on the sport's biggest stages. It's kind of disappointing to finish on this note.
It was only Federer's fifth defeat of a superb year in which he roared back from an injury lay-off in 2016 to win the Australian Open and Wimbledon titles. "With that season, I'm extremely happy". "I think it could be a very cool start to the year, which I'm really looking forward to".