The 22-year-old McMahon, who has 11 caps, has been tipped as long-term replacement in the position for Pocock, who suffered a hand injury against Argentina earlier this month and intends to take a sabbatical from the game next year.
Coach Michael Cheika said McMahon's improved lineout play and strong ball-carrying skills made him a clear choice, believing he will be perfectly suited to the high-altitude conditions at Loftus Versfeld.
"It's nice for us to be able to add a strong ball carrier into the back row. He's maybe not as tall as your traditional eight, but he's starting to get some of the qualities that a traditional eight has... ball carries, a strong tackle, which Poey's (Pocock) got as well," Cheika told reporters.
Cheika has named nine possible replacements and will decide later who to omit for the final match-day 23.
Fijian-born wing Sefa Naivalu, who became eligible for Australia on Sept. 18, has been named as a potential replacement and should he make it onto the pitch will become the 900th test cap for the country.
Australia are hoping for a first ever victory in Pretoria having lost all six of their previous visits to Loftus Versveld.
Team: 15-Israel Folau, 14-Dane Haylett-Petty, 13-Samu Kerevi, 12-Bernard Foley, 11-Reece Hodge, 10-Quade Cooper, 9-Will Genia, 8-Sean McMahon, 7-Michael Hooper, 6-Dean Mumm, 5-Rob Simmons, 4-Adam Coleman, 3-Sekope Kepu, 2-Stephen Moore (captain), 1-Scott Sio.
Replacements (one to be omitted): 16-James Hanson, 17-James Slipper, 18-Tom Robertson, 19-Kane Douglas, 20-Scott Fardy, 21-Lopeti Timani, 22-Nick Phipps, 23-Tevita Kuridrani, 24-Sefa Naivalu.
(Reporting by Nick Said & Mark Gleeson; Editing by John O'Brien)
