Australia have named their playing XI for the third and final Test against Sri Lanka, which gets underway at the Sydney Cricket Ground on Thursday.

Captain Michael Clarke has retained his position after recovering from a hamstring injury, while injured all-rounder Shane Watson has been replaced by left-arm seamer Mitchell Starc.

Starc is one of four fast bowlers in the lineup, which also includes fellow left-armer Mitchell Johnson and right-armers Peter Siddle and Jackson Bird. Spinner Nathan Lyon was chosen ahead of uncapped spinning all-rounder Glenn Maxwell.

Watson's calf injury, sustained during the second Test, which the hosts won insid three days to take an unassailable two-nil series lead, has also forced a change in the batting order.

Clarke will bat at four and the veteran Michael Hussey at five, while wicketkeeper-batsman Matthew Wade and all-rounder Johnson will occupy berths six and seven respectively. All four men will bat one position higher than normal.

"There's a fair bit of grass on the wicket. The boys bowled really well in the last Test match and bringing Mitchell Starc back into the team obviously helps our bowling attack, especially with the form he is in," said Clarke.

"And Mitchell Johnson is batting as well as an all-rounder now anyway.

"I'm confident we've got enough batting with Matthew Wade at six, Mitchell Johnson at seven and extra bowling which is a real positive for us.

"I think my hamstring's better than it was in Melbourne. If I didn't think I could perform at my best I wouldn't take the field. It certainly won't be because of my hamstring that I don't make a big score."

Australia: Michael Clarke (captain), David Warner, Ed Cowan, Phil Hughes, Mike Hussey, Matthew Wade, Mitchell Johnson, Peter Siddle, Mitchell Starc, Jackson Bird, Nathan Lyon, Glenn Maxwell (12th man).