Left-arm spinner Ashton Agar has been drafted into Australia's Test squad, winning the race to be Nathan Lyon's potential spin sidekick at the SCG.

National selectors recalled Agar in a 14-man squad for the fifth Ashes Test, starting on January 4.

Australia's SCG squad

  • Steve Smith (captain), David Warner, Cameron Bancroft, Usman Khawaja, Shaun Marsh, Mitchell Marsh, Tim Paine, Pat Cummins, Josh Hazlewood, Nathan Lyon, Jackson Bird, Mitchell Starc, Ashton Agar, Peter Handscomb

Mitchell Starc, who will be racing the clock to prove his fitness for the series finale, and Peter Handscomb, who was dropped for the third Test, have retained their spots.

Australia's XI for the dead rubber is far from settled. Starc remains bothered by his bruised heel but is confident he will be right to play.

Agar is no certainty to play his first Test on home soil but selectors will likely add the 24-year-old to their XI if the SCG pitch is spin friendly.

Agar, who scored 98 batting at number 11 during a memorable Test debut at Trent Bridge in 2013, suffered a broken finger during Australia's limited-overs tour of India in September.

He returned from the injury earlier this month during a Sheffield Shield clash at the MCG and has since played three Big Bash League fixtures for Perth.

After batting first drop during Perth's last-start win over Melbourne Renegades, he has spoken of his desire to become a genuine all-rounder.

Mitch Marsh has indicated he is ready to step up and bowl more overs of his medium pace in Sydney should Agar replace fast bowler Jackson Bird in the side.

Agar was selected ahead of uncapped leg-spinner Mitchell Swepson, who toured both India and Bangladesh this year with the Test squad but didn't debut, plus fellow left-arm tweakers Steve O'Keefe and Jon Holland.

Steve O'Keefe holds aloft the ball in Pune

O'Keefe played the past two SCG Tests. He also represented Australia in five Tests on the subcontinent this year, memorably spinning the tourists to their first win in India since 2004 when he snared match figures of 12-70 in Pune.

It was the greatest haul by a visiting spinner in India but selectors have since made no secret of their desire to look to the future.

O'Keefe was left out of the touring party for Bangladesh earlier this year then was belatedly called up for the second Test following Josh Hazlewood's side strain.

O'Keefe's Test career now appears over.

Australia snapped a nine-Test losing streak in Asia in Pune but Steve Smith's hunt for his first series win in the region is yet to end.

Australia's next assignment in Asia is expected to come in 2018, when they're due to play a Test series against Pakistan in the United Arab Emirates.

AAP

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