Fifth-seeded Errani beat Anna-Lena Groenefeld of Germany 6-3, 4-6, 6-1 in the semifinals on Saturday and Pennetta defeated another Italian, Tathiana Garbin, 6-1, 6-1 on the red clay courts of the Country Time Club.
Errani improved her career Palermo record to 12-1. Besides her title last year, Errani reached the semifinals in 2007.
Pennetta has not dropped a set all week. While Pennetta has never won the title in Palermo, it's the second time she's reached the final - the first was in 2004.
She lost to Errani in last year's semifinals but they are 1-1 against each other overall.
Barca agree Maxwell dealPennetta, Rezai, Garbin into Palermo quarters