Clarke on course and Bird in for Australia

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Australia captain Michael Clarke has been picked in a 12-man squad for the Boxing Day Test against Sri Lanka, while Tasmania seamer Jackson Bird will take the new ball.

Clarke - who suffered a hamstring injury in the first Test at Hobart - has been in doubt for the biggest day on Australia's cricket calendar.

The skipper was put through his paces at training today and came through unscathed, with coach Mickey Arthur expecting him to play.

Australia skipper Michael Clarke appears set to win his fitness battle to take his place in the Boxing Day Test against Sri Lanka at Melbourne

"He's clearly improving," Arthur said. "He went far better today than he did yesterday. If I was a betting man I'd bet on Michael Clarke leading the team out on Boxing Day.

"It will be a consultation between Michael and (team physio) Alex (Kountouris)."

The other major talking point out of Australia's squad was the selection of the 26-year-old Bird, who was drafted into an initial party as a replacement for Ben Hilfenhaus after the latter suffered a side strain in the first Test.

Bird was selected ahead of left-armer Mitchell Starc, who has been controversially rested due to heavy workloads, despite an impressive performance in the series opener against Sri Lanka at the Blundstone Arena.

Starc bowled Australia to victory with figures of 5-63 in the second innings as Sri Lanka's defiant efforts to gain a draw fell just short.

But with the 22-year-old on the sidelines, Bird will team up with left-armer Mitchell Johnson.

"We've got a lot of faith in Jackson," Arthur said of the tall paceman, who has taken 80 Sheffield Shield wickets for Tasmania in 14 matches at a stunning average of 17.5.

"At the start of the summer we had a list of bowlers that we wanted to keep fresh and ready to go and Jackson was one of them.

"He was one of them for the simple reason that he brings everything that we want ... pace, he brings swing and consistency.

"He's done it all. We've got no issues about throwing the new ball to him."

Australia squad: Michael Clarke (capt), David Warner, Ed Cowan, Phil Hughes, Shane Watson, Mike Hussey, Usman Khawaja, Matthew Wade (wk), Mitchell Johnson, Peter Siddle, Jackson Bird, Nathan Lyon.