Djokovic overpowered Canadian Milos Raonic 6-4 6-3 7-6 (7-1) on Tuesday night to set up a semi-final against Federer, who earlier survived seven match points against unseeded American Tennys Sandgren to progress 6-3 2-6 2-6 7-6 (10-8) 6-3.

Nadal will face the fifth-seeded Austrian on Rod Laver Arena on Wednesday evening, with the winner to play No.15 seed Stan Wawrinka or No.7 seed Alexander Zverev in a semi-final.

The Spaniard enjoys a 9-4 advantage in their head-to-head battle, but Thiem has defeated the world No.1 as recently as last year in Barcelona.

"Very tough match, he's playing well," Nadal said.

"We know each other well. He's a player that I like a lot, the way that he works, the way that he plays, and the way that he tries his best always.

"It's a match that is going to be a tough one, but will be interesting, no?

"I am excited to play this quarter-finals against Dominic. I know I have to be at my best to have chances.

"I think I am moving in the right direction ... every day I'm playing a little bit better."

Zverev and Wawrinka will face off in the afternoon session on Rod Laver Arena.

In women's quarter-final action on Rod Laver Arena on Wednesday, No.4 seed Simona Halep will face 28th-seeded Estonian Anett Kontaveit.

No.30 seed Anastasia Pavlyuchenkova will battle unseeded two-time grand slam champion Garbine Muguruza.

Australian Associated Press