The 27-year-old, who hit a magical 170 checkout against Gabriel Clemens on Tuesday night to become the first woman to reach the knockout stages of the competition, repeated her World Championship victory against Suljovic at the Alexandra Palace in 2019.
The Austrian came into the match off the back of a 104 average in his final group game but he was below-par on Thursday night.
Sherrock was the underdog but once again made a mockery of the odds to further launch her career to new heights.
It did not look like it would be that way early on as Suljovic took the opening two legs, but Sherrock hit a 100 checkout for a 11-dart finish before taking out 124 for a 12-darter to level things up.
Sherrock won six out of seven legs to lead 6-3 before Suljovic stopped the rot with a 14-dart hold of throw heading into the second interval.
Suljovic could not maintain any consistency, however, and he was duly punished as Sherrock, who herself was missing chances, moved one away from another famous victory at 9-4.
A classy 106 checkout on tops kept Suljovic in the match but Sherrock stormed to victory in the next leg, wrapping things up with a double nine after 14 darts.
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