The 24-year-old, who played his last test against Bangladesh in Chittagong in September, has been included alongside regular spinner Nathan Lyon for the Jan. 4 match at the Sydney Cricket Ground.
Left-arm seamer Mitchell Starc, who missed the ongoing Melbourne test due to a heel injury, and middle order batsman Peter Handscomb, who was dropped from the side after the second Adelaide test, have been retained in the 14-man squad.
Agar broke a finger during Australia's limited-overs tour of India in September but returned to domestic action earlier this month.
If Starc proves his fitness, Agar could be included at the expense of seam bowling all-rounder Mitchell Marsh.
Agar's inclusion will fan speculation that 33-year-old left-arm spinner Steve O'Keefe's international career is over despite his appearance in five tests on the subcontinent this year and his match-winning 12-wicket haul against India in Pune.
O'Keefe was belatedly called up for the Bangladesh tour after paceman Josh Hazlewood was ruled out of the Chittagong test with a side strain, but selectors have made no secret of their desire to look to groom a young spinner for the long term.
Ashes 2017ashton agaraustralia vs englandJosh HazlewoodMitchell MarshSteve O'Keefesteve smithSydney Test
First Published: December 30, 2017, 8:53 AM IST