The Norwegian wrapped up his tour-leading 28th win of the season in straight sets in an entertaining semi-final battle against the determined Argentine.
Three-time Grand Slam runner-up Ruud will face either Stefanos Tsitsipas, who beat him in the Monte Carlo Masters final last week, or Dusan Lajovic in Sunday's final.
"It's been fantastic, two weeks has been really good, two finals in a row and it's gonna be special tomorrow, I'm gonna play for the biggest title of my career," Ruud told Teledeporte.
"It was a difficult match, level-wise maybe it was my best match here in Barcelona, a very tough opponent, Tomas is playing fantastic tennis.
"I was a bit lucky in the first set... but that's what you need sometimes, a bit of luck."
Ruud lost two finals in Mexico and then against Tsitsipas in Monte-Carlo but is enjoying a strong season.
The players traded breaks in the first set, with Ruud's superb forehand winner earning him a 4-2 lead.
However Etcheverry broke back with Ruud slapping another forehand into the net and consolidated for 4-4. Ruud dropped two set points before eventually shading a tight tie-break.
In the second set Ruud broke straight away but Etcheverry immediately hit back. The Norwegian broke again decisively in the fifth game and served it out.
Ruud wrapped up his win by converting the second of three match points when Etcheverry sent a return into the net.
