Cricket Australia has confirmed Shane Watson will captain his country in Sunday's Twenty20 match against India in Sydney on Sunday.
Watson will replace Aaron Finch, who misses out through injury after damaging his left hamstring during the 27-run defeat on Friday in their second game of the three-match series at the MCG in Melbourne.
Usman Khawaja is set to be called up for the dead rubber to replace the injured skipper and has been drafted into the ODI squad for the tour of New Zealand.
Watson has been appointed after recommendation from the national selection panel was approved by Australia's board of directors.
"It is an honour to be asked to lead the side on Sunday, although the circumstances are far from ideal," Watson told Cricket Australia.
"We may have lost the series but there is a great deal to play for with the ICC World Twenty20 coming up and you can be sure we will be determined to do well in Sydney."
All-rounder Watson, 34, is his country's most experienced member of the current squad but is yet to captain the side in a T20 fixture.
He previously captained Australia in one Test and nine ODIs in 2012 and 2013.