Bailey got the nod in a 12-man squad on the back of his remarkable one-day international form including the recent tour to India where he amassed 478 runs at 95.60 while also serving as captain.
"We have included George Bailey in this line-up and are excited by what he can offer at Test level," national selector John Inverarity said of the 31-year-old, ahead of the first Test in Brisbane, starting on November 21.
Selectors will be hoping he can bring much-needed middle order stability with the Tasmanian preferred to Alex Doolan.
"It was certainly discussed at great length last night. Of course the national selection panel have been in contact quite a bit over the last few weeks and that had a lot of discussion," Inverarity said of the selection.
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"Alex Doolan is a very highly regarded player in our eyes. But George Bailey has been in fantastic form with the bat."
There were no surprises in the squad, with a rejuvenated David Warner to open the innings with Chris Rogers after hitting four centuries in the past month and all-rounder Shane Watson included despite a niggling hamstring injury.
James Faulkner is likely to be 12th man, although he will play if Watson does not recover sufficiently.
Johnson returns to the attack alongside Ryan Harris and Peter Siddle in the absence of the injured Mitchell Starc, with the 32-year-old left-armer set for his first Test since Australia's loss to India in March.