The right-handed batsman, who is likely to play at number six, boasts a first class average of 38 and earned his call-up on the back of his captaincy of Australia in the recent one-day series against India.
Bailey's batting success in India, a trip captain Michael Clarke skipped to rest his back injury, earned him the nod ahead of his Tasmania team mate Alex Doolan on Tuesday.
"George Bailey has been in fantastic form with the bat," head selector John Inverarity said at the team announcement in Brisbane.
"His confidence is riding high, his performance in international one day cricket has been quite extraordinary and he's very deserving of his opportunity."
Erratic fast bowler Mitchell Johnson was, as expected, recalled to join Peter Siddle and Ryan Harris in the pace attack for the test at the Gabba in Brisbane, which starts on November 21.
James Faulkner, who made his debut in the final test of the first Ashes series earlier this year, was included but is most likely to play only if fellow all-rounder Shane Watson fails to recover sufficiently from a hamstring injury to bowl.
"In that 12 you've got considerable facility, we could play five batsmen and five bowlers or we could play four quicks and no spinners and three quicks and one spinner," Inverarity said.
"Shane is progressing very well in regaining his fitness and we're confident he'll be fit to play. We're not sure, with nine days to go, to what extent he'll be able to bowl."
With Mitchell Starc, Jackson Bird and James Pattinson all unavailable through injury, Johnson gets a chance to resurrect his reputation in what will be his first Ashes action since the 3-1 series defeat in Australia three years ago.
"He's in good rhythm and bowling with good pace and we're confident he'll acquit himself very well and be a bowler to the fore in our attack," Inverarity said.
Australia face the prospect of a fourth successive Ashes series defeat over the next two months with matches in Adelaide, Perth, Melbourne and Sydney following the Brisbane opener.
With the emphasis on stability and experience -- seven of the squad are over 30 -- there was no shock selection like that of spinner Ashton Agar before the opening test of the first series of the year, which England won 3-0.
Agar's international career has since stalled and Nathan Lyon, who seems destined to approach every test with a question mark over his name, retained his place in squad.
"The spinner's position is greatly watched because of how great Shane Warne was," said captain Clarke.
"But I think Lyon-o's done fantastic in international cricket. He's played a lot for us, he's a wonderful guy and I think he'll have a fantastic summer."
Squad: Chris Rogers, David Warner, Shane Watson, Michael Clarke (captain), Steve Smith, George Bailey, Brad Haddin, Mitchell Johnson, Peter Siddle, Ryan Harris, Nathan Lyon, James Faulkner.
(Editing by Peter Rutherford)
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