The tourism body had previously worked with agencies on a regional basis, but said it desired a more consistent "Brand Australia" message.
M&C Saatchi gambled with its £13.5m Tourism New Zealand account by going after its client's rival, but the move has paid off.
The pitch saw the three shortlisted agencies make presentations in Tokyo, Los Angeles, London, Hong Kong and Auckland, before lining up before Tourism Australia's senior management and board in Sydney in May.
Tom Dery, executive chairman of M&C Saatchi Asia-Pacific, said: "M&C Saatchi was born and bred on travel and tourism accounts and this win is the perfect way to celebrate our 10-year anniversary."
The current UK campaign, "Australia. A different light" featuring the singer Delta Goodrem, was created by the UK incumbent Grey along with TBWA in Sydney.
M&C Saatchi has now resigned the Tourism New Zealand account, which it held for six years. Tourism New Zealand began the process of re-tendering for the account at the end of May when it learned that M&C Saatchi had been shortlisted for Tourism Australia.
Tourism Australia took the same regional-to-global approach with its media account, appointing Carat. The UK incumbent was MediaCom.
The win will come as good news for M&C Saatchi, which currently faces a review of its oldest client, British Airways.
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