In an enthralling yet rugged encounter that swung both ways, pre-tournament favourite O’Sullivan appeared at ease after taking a 2-1 lead in their quarter-final clash.
However Hawkins won the next two frames as a stunned world number one staged a remarkable fightback, rattling off the next four frames in a row without reply to book his place in the last four.
O'Sullivan, who survived a late scare from Ding Junhui in the opening round, will next face Shaun Murphy for a place in Sunday's final - Murphy defeated Jack Lisowski 6-3 in the later match on Thursday.
"I feel sorry for Barry," O'Sullivan told Eurosport.
"He was playing good until he started playing me, and I just dragged him down to probably the most awful standard of snooker.
"I’m really sorry about that today. I’m just lucky to get through, that’s all I can say."