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The Briton only needed one set to reach the last four, but beat the Swiss 6-4 6-2 to top the John McEnroe Group.
Murray extended his winning streak to 22 matches and goes on to face Milos Raonic at 14:00 GMT on Saturday.
Serb Novak Djokovic faces Japan's Kei Nishikori in the other semi at 20:00.
Djokovic also won all three of his group matches, and Murray must at least match his results at the O2 Arena to end the year at the top of the rankings.
In the last group match of the tournament, Croat Marin Cilic defeated Japan's world number five Nishikori 3-6 6-2 6-3.
Cilic's win means he will replace Frenchman Gael Monfils to become the new world number six.
Murray withstood an early barrage of winners from Wawrinka before taking a grip on the match midway through the first set.
"The first set was tight. There weren't many chances," said Murray, 29.
"I managed to get the break late in the set. In the second set I'd already qualified for the semis, so maybe it was easier for me to play more free than him."
The Scot knew he only required one set, while Wawrinka was really in need of a straight-set victory, lending the contest an added air of tension from even the early stages.
A healthy contingent of Swiss fans among the 16,000 spectators added to an atmosphere more akin to the latter stages of a Grand Slam.
Wawrinka, 31, blasted four winners in the opening game but could not make the breakthrough and Murray capitalised in game seven.
A loose backhand gave Murray a break point and when the Swiss failed to put away a forehand pass, the Wimbledon champion pounced at the net - prompting Wawrinka to smash his racquet in anger.
Murray could have been forgiven for a few nerves when three set points then slipped by on the Wawrinka serve, but he served out calmly in the following game and qualification was secure.
Wawrinka framed a forehand to drop serve at the start of the second and his challenge was all but over, as Murray raced 4-0 clear and closed it out after one hour and 26 minutes.
Murray's 22-match winning run equals the career-best effort he set earlier this year from Queen's Club in June to Cincinnati in August.
During that run he beat Raonic in the Queen's and Wimbledon finals, and he has since had another win over the Canadian in Cincinnati.
Raonic, seeded fourth, won two of his three group matches in London, only losing a tight two-set match against Djokovic.
"He's played very well in this event," said Murray, who has won his last eight in a row against Raonic. "These are quick conditions here and it'll be tough.
"He's got a huge serve. It's an amazing stadium and atmosphere."
Andy Murray qualified for the semi-finals and stayed on track to retain the world number one ranking with victory over Stan Wawrinka at the ATP World Tour Finals.