Gillard, country's first woman premier has appeared on the Australian Women's Weeklies cover where she is seen posing on an armchair while knitting, surrounded by balls of wool, with her dog Reuben at her feet.
Gillard, 51, is knitting a toy kangaroo as a gift for the royal baby. The kangaroo is the national animal of Australia and also appears on the National coat of arms.
This comes amid her tough final week in Parliament ahead of September elections.
Seeing this as an opportunity to show a different side of her beyond politics, Gillard said, "I just thought it would be a cute project to work on."
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According to Sydney's The Daily Telegraph, the concept of the Prime Minister knitting a toy kangaroo came directly from Gillard's own staff.
Gillard is globally known for her stance against sexism.
Gillard said she still hoped Australia would one day become a republic.
"I do hope we become a republic. I campaigned for a yes case. We will get there again. There is a real sense of respect for the queen, so I do think a natural moment to look again will be when her reign comes to an end".
"Prince William and Kate, and their child, will still be personalities in Australia. People will still follow their lives with interest", she said.