Federer, who saved two match points against Benoit Paire in the second round the day before, recovered to go 6-5 up and then broke Ebden to take his first match point for a meeting with American qualifier Denis Kudla.
Playing his eighth match in less than two weeks, the 36-year-old Federer seemed clearly worn out but showed great mental strength to save five break points in the second set.
The 36-year-old won Saturday's semi-final, 7-6 (7-1) 7-5.
With Alexander Zverev and Dominic Thiem already out of the competition, Federer's path towards a second consecutive Halle title is clearing - and that continued on Thursday.
Ebden did not make it easy for Federer, staying with the Swiss into the first-set tie-breaker.
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But the top-ranked Swiss took the next three points to close the match in just under two hours at the grass-court tournament.
Federer's preparations in the build-up to the defence of his Wimbledon title had been running smoothly, with a title last week in Stuttgart and a solid opening Halle win for the top seed.
Nick Kyrgios smashed 32 aces in a 7-6 (3), 6-7 (5), 6-3 win over Kyle Edmund in another match.
Federer has now won his last 20 matches on grass, and he comes off a title just last week in Stuttgart.
Taking everything into consideration, I am expecting Roger Federer to win this match and take home the ATP Halle title.
"I created quite a few opportunities, but maybe I was a bit tentative at times", Federer said.