Cilic, the sixth seed, led 3-6, 6-3, 6-7, 6-2, 2-0 before the Spaniard retired hurt with a knee problem in the decider.

The top seed, who endured an injury-hit end to last season, had looked in commanding form in a thrilling quarter-final clash at the Rod Laver Arena.

The two players traded brutal shots from the back of the court before disaster struck for Nadal in the fourth set.

Nadal looked in visible plain and underwent lengthy treatment in a bid to ensure he finished the match.

But he was unable to continue when the Croatian took a 2-0 advantage in the fifth, handing Cilic a place in the last four.

Cilic will take on Britain's Kyle Edmund, one of the surprise packages at the tournament, after he stunned world number three Grigor Dmitrov with a 6-4, 3-6, 6-3, 6-4 triumph.

"It was an unbelievable performance from both of us and it's really unfortunate for Rafa," said Cilic.

"He always gives his best and it's unfortunate for him to end this way.

"I was really paying attention to these first couple of games [in the final set] and trying to keep my intensity up. It was important for me to continue with my own game and not look across the net."

There was also a surprise in the women's singles as fourth seed Elina Svitolina of the Ukraine was comprehensively beaten by Belgium's Elise Mertens.

The unseeded Belgian produced a superb display to thrash Svitolina 6-4, 6-0 to seal her semi-final berth.

Mertens will take on second seed Caroline Wozniacki after the Dane ousted Carla Suárez Navarro of Spain 6-0, 6-7, 6-2.