Bailey, who was part of the 5-0 Ashes triumph over England, finds himself out of 15-man squad for the three-Test series against South Africa. Bailey managed only 183 runs at 26.14 in the Ashes series.
Shaun Marsh, Alex Doolan, James Pattinson, Jackson Bird and James Faulkner are part of the squad. These five were not part of Ashes campaign.
The squad led by Michael Clarke will have Brad Haddin as his deputy.
Commenting on the Test squad, National Selector John Inverarity said: "We believe this is a strong squad with sufficient flexibility for this great challenge of taking on the world's top ranked Test team.
"We have selected Alex Doolan and Shaun Marsh as two of seven batsmen in the squad. George Bailey, who played an important role in the Test team that defeated England 5-0, has been overlooked for this tour. This was a difficult decision, but on this occasion we felt Alex and Shaun have games that are well suited to facing South Africa in South Africa."
He continued: "We consider that both are strong players of pace bowling which is important given the strength of South Africa's attack. .
"Shaun is a talented batsman who is striking the ball very well at the moment. He has the technique and potential to do well.
"James Pattinson is regaining fitness and form. At his best he is a fine Test match bowler. Jackson Bird shaded out Nathan Coulter-Nile for the final bowling position and each of these bowlers is showing encouraging form.
"The majority of the squad will depart on 29 January with the exception of James Faulkner who will remain behind to play in the T20 Series and join the team during the warm-up game in Potchefstroom."
The first Test starts in Centurion on February 12. The second Test is in Port Elizabeth from February 20 and the final match in Cape Town from March 1.
Australian Test squad
Michael Clarke (captain), Brad Haddin (vice-captain), Jackson Bird, Alex Doolan, James Faulkner, Ryan Harris, Mitchell Johnson, Shaun Marsh, Nathan Lyon, James Pattinson, Chris Rogers, Peter Siddle, Steven Smith, David Warner, Shane Watson.