Luther Burrell replaces Farrell at inside centre, while Marland Yarde is picked on the wing ahead of Jack Nowell, who is named as a replacement.
Ex-captain Chris Robshaw is back on the blind-side after missing the Wales win.
Coach Eddie Jones has opted to start with the same pack which began the final Six Nations game against France.
England secured the Grand Slam with a 31-21 victory in Paris, but they have never won a Test series in Australia, winning just three of 17 Tests down under.
"It's important we get off to a positive start and we'll arrive ready to play physical and aggressive rugby," said Jones.
"We have a young squad with an average age of 24, so we are still developing and improving. It'll be a great challenge for us."
Captain Dylan Hartley was more bullish, however.
"If we don't expect to win, I don't see the point in even boarding the plane," the 30-year-old told BBC Sport.
"We expect to win, we believe we can win, we are here to win."
England fly-half Ford, 23, missed six out of seven kicks at goal during the 27-13 warm-up victory over Wales.
That performance, combined with Farrell's brilliant form for title-winning Saracens, seems to have influenced the coach's decision.
There had been suggestions Maro Itoje might move from lock to blind-side flanker in place of Robshaw, who missed the Wales game to attend his brother's wedding, with Joe Launchbury coming into the second row.
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However, Wasps lock Launchbury - man of the match against Wales - has to settle for a place on the bench alongside Northampton second row Courtney Lawes.
Alex Goode, the newly-crowned Aviva Premiership player of the season, has been left out of the 23, while full-back Mike Brown is poised to win his 50th cap.
Australia have named three debutants - centre Samu Kerevi, lock Rory Arnold and winger Dane Haylett-Petty - as they bulk up their side.
BBC Radio 5 live rugby reporter Chris Jones:
Jones has long-spoken about the first Test as a physical battle - and the selection of Burrell in the midfield certainly supports that view.
With Jones keen for a ball carrier at number 12, Ford was always likely to be the one to make way, especially with Farrell in the form of his career.
Nowell's relegation to the bench is a shock, though. Jones says the Exeter man is "not quite sharp" while Yarde is "in a purple patch".
With two locks on the bench - Launchbury and Lawes - Itoje is likely to move to the flank in the second half.
It may be a three-Test series, but the message from the England camp here in Brisbane is that Saturday's game is a "must-win".
England: 15. Mike Brown; 14. Anthony Watson, 13. Jonathan Joseph, 12. Luther Burrell, 11. Marland Yarde; 10. Owen Farrell, 9. Ben Youngs; 1. Mako Vunipola, 2. Dylan Hartley, 3. Dan Cole, 4. Maro Itoje,  5. George Kruis, 6. Chris Robshaw, 7. James Haskell, 8. Billy Vunipola.
Replacements: 16. Luke Cowan-Dickie, 17. Matt Mullan, 18. Paul Hill, 19. Joe Launchbury, 20. Courtney Lawes, 21. Danny Care, 22. George Ford, 23. Jack Nowell.
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Owen Farrell will start at fly-half for England in Saturday's first Test against Australia in Brisbane with George Ford dropping to the bench.