The world's twelfth-largest economy expanded an annual 3 percent in the last three months of 2015, well above both analysts' expectations for a flat reading and the previous period's 2.5 percent rise.
On a quarterly basis, Australia's gross domestic product (GDP) rose 0.6 percent, slower than the third quarter's 0.9 percent spike but still beating forecasts for a 0.4 percent gain.
Gross fixed capital expenditure dropped 0.6 percent during the fourth quarter however, while final consumption spending rose 0.7 percent on a seasonally-adjusted basis.
The GDP report bolstered the Reserve Bank of Australia's (RBA) decision to keep interest rates at a record low of 2 percent.
On Tuesday the RBA left monetary policy steady for the tenth straight month, with Governor Glenn Stevens stating "there were reasonable prospects for continued growth in the economy."