"He failed to meet the requirements of the graduated return to play protocol for the concussion he sustained against New Zealand last weekend," a Scottish Rugby statement said on Friday.
Uncapped Edinburgh centre Phil Burleigh comes in to the match-day 23 for the first time to take Horne's place on the bench as Scotland make five changes to the team that suffered an agonisingly narrow 22-17 loss to New Zealand on Saturday.
Ryan Wilson returns from injury at No.8 while New Zealand-born prop Simon Berghan, making his first start for Scotland, is preferred to Zander Fagerson in the front row.
Grant Gilchrist replaces Australian-born Ben Toolis at lock and Sean Maitland is back on the wing after belatedly joining the squad.
Scotland are seeking another victory over Australia after their 24-19 victory in Sydney in June, which was revenge for a controversial exit at the hands of the Wallabies in the 2015 Rugby World Cup.
Saturday's match is the last of three November internationals for Scotland, who beat Samoa before their loss to the All Blacks.
Team: 15-Stuart Hogg, 14-Tommy Seymour, 13-Huw Jones, 12-Peter Horne, 11-Sean Maitland, 10-Finn Russell, 9-Ali Price, 8-Ryan Wilson, 7-Hamish Watson, 6-John Barclay (captain), 5-Jonny Gray, 4-Grant Gilchrist, 3-Simon Berghan, 2-Stuart McInally, 1-Darryl Marfo Replacements: 16-Fraser Brown, 17-Jamie Bhati, 18-Zander Fagerson, 19-Ben Toolis, 20-Cornell du Preez, 21-Henry Pyrgos, 22-Phil Burleigh, 23-Byron McGuigan.
(Reporting by Mark Gleeson; Editing by Ian Chadband)
