According to bbc sports Norrie, 28, was aiming to win back-to-back titles at the Brazilian clay court tournament after defeating Carlos Alcaraz in last year’s final.
But the British number one struggled in hot and humid conditions in Rio.
The 22-year-old Navone, ranked 113th in the world, won 6-4 6-2 to reach his first ATP final.
He will face compatriot Sebastien Baez after the world number 30 won 7-5 6-4 against another Argentine, Francisco Cerundolo.
Both Navone and Norrie broke serve in the opening two games before Navone gained the decisive break in the seventh game of the first set.
