Leg-spinning all-rounder Marnus Labuschagne was Sunday added to Australia's squad for the fourth and final Test against India in Sydney, beginning Thursday.

Australia go into the game at the Sydney Cricket Ground 2-1 down in the four-Test series after a crushing 137-run defeat in Melbourne.

They had previously named a 13-man squad for both Melbourne and Sydney and have added South African-born Labuschagne for a match they must win to prevent India securing a first-ever series victory Down Under.

"We'll get up to Sydney and have a look at the conditions," skipper Tim Paine said in confirming Labuschagne's inclusion. "From what we're hearing, it'll probably spin quite a bit so once we see that for ourselves, we'll start to think about the best combination for ourselves to win that Test."

Labuschagne being brought in could spell trouble for fellow all-rounder Mitch Marsh, who was recalled for the Melbourne Test but failed to make an impact.

Australia squad: Aaron Finch, Peter Handscomb, Marcus Harris, Travis Head, Usman Khawaja, Marnus Labuschagne, Mitch Marsh, Tim Paine (capt) Nathan Lyon, Shaun Marsh, Pat Cummins, Peter Siddle, Mitchell Starc and Josh Hazlewood.