The Waratahs' 21-17 loss to the Melbourne Rebels left them with a perilous 2-3 record heading into the midway point of the season, six points behind the Australian conference-leading Brumbies and Rebels.
Making his first Super Rugby start in the position, Folau will partner Kurtley Beale in the centres, with the Wallabies utility returning from an elbow injury, the team said on Thursday.
Gibson has also taken the axe to his forward pack, dumping club captain Dave Dennis to the bench and bringing the imposing Will Skelton into the starting side to partner fellow Wallabies lock Dean Mumm in the second row.
The Brumbies were annihilated by New Zealand's Waikato Chiefs at home in their last match, with Wallabies flanker David Pocock later suspended for grabbing an opponent's neck.
Loose forward Ita Vaea's shock retirement earlier this week due to a heart condition further unsettled the Canberra team's plans.
Jarrad Butler, who has not played in over a month due to injury, will replace Pocock, with Jordan Smiler to fill Vaea's spot at number eight for the away match in Sydney.
(Reporting by Ian Ransom; Editing by Amlan Chakraborty)
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