Lydiate currently has two international caps to his name, while Harries has played just once for Wales, in the second Test defeat to New Zealand on the recent summer tour.
Head coach Warren Gatland has picked youth over experience in the back row, with Sam Warburton starting at openside ahead of Blues team-mate Martyn Williams.
Williams is just one cap shy of 100 Test appearances for Wales and the Lions but the 35-year-old has to make do with a spot on the bench for the first of four autumn internationals to be played in the Welsh capital.
With Ospreys full back Lee Byrne ruled out through injury, clubmate James Hook reverts to full back, with Andrew Bishop and Tom Shanklin starting in midfield.
Scarlets playmaker Stephen Jones and Ospreys wing Shane Williams join Shanklin as the only players over 30 in the starting line up.
Jonathan Thomas takes over from fellow Osprey Ryan Jones at No8, with Jones unavailable through injury.
Gatland can call on an all-Lions front row of Gethin Jenkins, Matthew Rees and Adam Jones, with Rees captaining his country for the first time.
Bradley Davies joins Ospreys skipper Alun Wyn Jones in the second row, with Mike Phillips going head to head with another of the game's finest scrum-halves in Will Genia.
In total, the Ospreys provide seven members of the starting XV, plus three replacements, with Gatland naming four Blues in his XV and four more on the bench, while the Dragons and the Scarlets contribute two players to the run-on side.
"The front five virtually picks itself, when they're all fit and playing well," said Gatland.
"There's two young boys in the second row there who have been going really well, Bradley in particular is in great shape and we will be looking to get the ball in his hands as much as possible, he is a real player for the future.
"There was debate in the back row and we decided we wanted to have another look at Sam who hasn't played for us since South Africa in the summer, when he did very well.
"We had options on the wing as well and we thought about Chris Czekaj at full back but in the end we've gone for experience there with James Hook and that then gives us a centre combination which retains experience too.
"At scrum-half, Richie Rees has been putting pressure on Mike Phillips with some dynamic performances for the Blues so it's a big game for Mike, we are looking for him to be physical and really lead the way.
"We are still hurting as a squad from the way the Wallabies beat us last year. They were impressive as a forward pack and they repeatedly won turnover ball which gave them the game.
"It's tough times out there for everyone at the moment and those fans who have put their hands in their pockets to support Wales have made a real commitment to the cause already.
"We spoke this week about the responsibility we have to those fans now to perform."
Wales (vs Australia, Millennium Stadium, Saturday, 2.30pm)
15 James Hook
14 Will Harries
13 Tom Shanklin
12 Andrew Bishop
11 Shane Williams
10 Stephen Jones
9 Mike Phillips
1 Gethin Jenkins
2 Matthew Rees (captain)
3 Adam Jones
4 Bradley Davies
5 Alun Wyn Jones
6 Dan Lydiate
7 Sam Warburton
8 Jonathan Thomas
Replacements
16 Huw Bennett
17 Paul James
18 Deiniol Jones
19 Martyn Williams
20 Richie Rees
21 Dan Biggar
22 Chris Czekaj
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