Farrell replaces Henry Slade at inside-centre in one of four changes to the side that laboured past Argentina last Saturday in a 21-8 victory.
Full-back Mike Brown has not been considered due to concussion so Anthony Watson will switch to the number 15 spot for the first time in his England career, with Jonny May starting on the wing instead.
Joe Launchberry replaces George Kruis at second-row while Joe Marler has returned from suspension to take up a place as one of the replacements.
Head coach Eddie Jones has been positive about his team's preparations for the game and feels they will have to be at their best to get a result against the Wallabies.
He said: "The players have had an extremely positive week.
"This is going to be a great challenge, as we know Australia have been in great form towards the end of their season.
"We will have to be effective in everything we do to win."
England have beaten Australia four times in Jones' tenure but the Wallabies have recently come off the back of wins against New Zealand and Wales.