Novak Djokovic breathed a huge sigh of relief after pulling out all stops to deny Daniil Medvedev and lead Serbia into the final of the inaugural ATP Cup.

Thrilling Sydney’s Serbian fans for the second day in a row, Djokovic outlasted Medvedev 6-1 5-7 6-4 in a two-hour, 47-minute slugfest to give his team an unbeatable 2-0 lead in the opening semi-final.

Dusan Lajovic had upset world No.17 Karen Khachanov 7-5 7-6 (7-1) in Saturday’s opening singles rubber at Ken Rosewall Arena.

Runner-up to Rafael Nadal at last year’s US Open and unbeaten in his four singles rubbers this week, Medvedev threw everything at Djokovic.

He had the world No.2 repeatedly doubling over and gasping for air after a series of long-busting baseline duels.

But, not for the first time in his distinguished career, Djokovic had the answer, the 16-time grand slam champion breaking the world No.5 for a fifth time in the fifth game of the deciding set.

He needed to fend off three break points from Medvedev in the final game, though, before finally prevailing with his second match point.

“It was very exhausting,” a mightily relieved Djokovic said, having obliterated a racquet during a second-set tantrum.

“It was a big battle all the way to the last shot. Daniil Medvedev is one of the best players in the world and today he showed why.

“He’s tough to break from the baseline and this was the toughest challenge I’ve had (this tournament).”

Djokovic’s victory levelled his career series with the Russian at 3-3, after he’d lost the past two, and set up a final on Sunday night for Serbia against Spain or Australia.

Led by world No.1 Nadal, Davis Cup champions Spain play Australia on Saturday night in the second semi-final.

Nadal faces Australian No.1 Alex de Minaur, after Roberto Bautista Agut plays Nick Kyrgios in the opening singles rubber.

-AAP