Sixth seed Amanda Anisimova also departed as the American fell in a third-set tie-break to France's Diane Parry.
Former Australian Open winner Madison Keys edged ninth seed Victoria Mboko 6-3, 5-7, 7-5.
Earlier, Sabalenka beat Australia's Daria Kasatkina 6-0, 7-5 in just 76 minutes to stamp her ticket to the fourth round.
After racing through the first set, Sabalenka went an early break down to her 53rd-ranked opponent before battling back.
The Belarusian world No. 1 set up a meeting with her fellow quadruple major winner, Osaka.
Sabalenka and Osaka, both 28, have won two Australian Opens and two US Opens apiece.
Sabalenka has beaten Osaka twice this season, but Osaka won their only previous meeting at a major — at the same stage in the 2018 US Open, the first of her major titles.
"I'm just ready for the fight," Sabalenka said of facing Osaka. "I'm ready to go out there to fight for that match, for that win. Ready to do anything it takes to get the win."