Zhao, 29, had been aiming to become the only first-time winner to defend his crown since the tournament moved to the Crucible Theatre in 1977.
However, he simply had no answer as the 43-year-old Englishman knocked in a barrage of pots to reach the last four for the sixth time.
Murphy, who has made it his personal mission to repeat his success from 2005 when he claimed his one and only world title to date, got under way in style, fashioning a 96 break to edge into a 9-8 lead.
While Zhao immediately responded with a 71, Murphy compiled breaks of 80 and 70 as he reeled off the next three frames to put himself on the cusp of victory against a player he lauded as the "best on the planet" earlier in the week.
A composed run of 81 from Asia's first world champion took the contest to a 23rd frame.
But when Murphy picked out a sublime red to the middle from the bottom of the pack he was able to construct a break of 69, and with Zhao unable to get the snooker he required, the 'Magician' wrapped up a famous triumph.
In commentary, seven-time world champion described Murphy, who at one stage trailed 3-0 and lost the impetus on Tuesday evening, when Zhao fought back from 8-6 to 8-8, as delivering a "flawless" performance.
"I think when you are playing great player - which Zhao unquestionably is - it makes it straightforward for you," Murphy told BBC Sport.
"I just knew I had to play properly and knew I had to be somewhere near my best and I think I was.
"I'm so in awe of Zhao Xintong and how he plays the game. When he is in full flow, he is mesmerising to watch.
"It is one of the best wins of my career."
Zhao, who became the first ever player to win all three events in the Players Series in the same season and only the third to bank in excess of £1m in a single campaign, added: "Shaun played really well and put me under big pressure. He played perfect snooker and deserves his win.
"He is a very good player and congratulations to him. I give him some very difficult long pots but he could pot everything today.
"All this season I have had big pressure but now it is gone. I trust myself to come back strongly."
To play this video you need to enable JavaScript in your browser.This video can not be played
Earlier on Wednesday, Mark Allen's bid to become the oldest first-time world champion in the modern era gathered momentum as he reached the semi-finals with a 13-11 victory over Barry Hawkins.
The 40-year-old Northern Irishman is aiming to complete snooker's Triple Crown, having previously triumphed in the UK Championship and Masters.
However, snooker's biggest prize has so far eluded him in 19 previous attempts with his win over Hawkins earning him a place in the last four for only the third time.
Having resumed at 8-8, Allen took the opening two frames of Wednesday morning's session only to be pegged back by the 2013 finalist, who knocked in breaks of 70 and 83 in response.
The players traded frames before Allen constructed his third century of a high-quality affair to move 12-11 ahead.
In a dramatic final frame, Allen took control with a break of 59 and sealed his passage to the single-table stage after the Englishman underhit an attempted snooker on the pink just seconds after fluking a red to give himself the chance to force a decider.
Allen said he felt "relief more than anything".
He added: "I thought the second session was one of the best I have ever been involved in. It was really high-quality snooker.
"My heart sank when he fluked that red - I'm over the moon to get over the line. If you could have seen inner Mark when he didn't reach the pink, he was doing somersaults and then I potted a good yellow.
"I have won everything else. Why can't I win this? I am thinking about it because I come here every year thinking I can win it for the first time."
Allen will now face either Wu Yize or Hossein Vafaei in a best-of-33 encounter that begins on Thursday at 19:00 BST.
On the other side of the arena, Neil Robertson retained the two-frame advantage he held overnight after the first session on Wednesday. He will take a 9-7 lead against John Higgins into the final session of their quarter-final at 19:00 BST.
After extending his lead to 6-3 by taking the day's first frame, the Australian was forced to watch on as four-time champion Higgins knocked in a barrage of big breaks with runs of 51, 86 and 126 to draw level.
Robertson, whose only Crucible success arrived in 2010, crafted breaks of 60 and 95 on his way to reeling off the next three frames before Higgins countered with an 80 to set up an intriguing finale.
Should Allen win the world title, he will become the oldest first-time winner in the modern era, eclipsing Stuart Bingham, who became champion in 2015, aged 38 years and 343 days.
At 47, that would also have applied to the likeable Hawkins but instead it proved to be a disappointing conclusion to a wonderful match in which he contributed 10 half-century breaks and two centuries.
"The big difference was I lost a couple of frames where I had the balls at my mercy," Hawkins said.
"[It was] unforgiveable not reaching the pink. It was a horrible way to go. I was gutted.
"What a way to lose. Knowing you have played an absolute terrible shot. It was a sinking feeling after trying so hard in a long match like that."
