The batsman stands in for Ricky Ponting, who has been ruled out of the game which the hosts need to win to level the series after aggravating the fracture in his left little finger in the comprehensive fourth Test defeat.
Australia have called Pakistan-born batsman Usman Khawaja into their 12-man party for the Sydney Test as Ponting's replacement, while Doug Bollinger comes in for another injury victim, Ryan Harris.
Wicketkeeper Brad Haddin has been named as vice-captain for the match, while Cameron White will take on that role for the one-day and Twenty20 internationals.
Cricket Australia chief executive officer James Sutherland said: "Given the injury to Ricky Ponting the national selection panel made a recommendation to the Cricket Australia Board this afternoon that Michael Clarke assume captaincy of the Australian Cricket team for the fifth and final Vodafone Ashes Test match in Sydney and for the Commonwealth Bank one-day series.
"This recommendation was unanimously endorsed by directors.
"Brad Haddin has been appointed as vice-captain for this remaining Test match while Cameron White will deputise for Michael in both the one-day and Twenty20 form of the game.
"We congratulate Michael on his appointment and wish him well for the next few weeks."
Ponting was passed fit for the fourth match of five at the MCG after suffering the injury in the third Test in Perth last week.
But after having the finger x-rayed again yesterday following the innings-and-157-run defeat which saw England retain the Ashes, the 36-year-old, who has come under severe pressure over his own poor batting form this winter and especially after the landslide defeat in Melbourne which confirmed his team's failure to regain the Ashes, has learned he may need surgery to treat the injury and will therefore not be able to play in the new year Test at the SCG.
Chairman of selectors Andrew Hilditch added: "Obviously we are very disappointed to have failed to win back the Ashes but we look forward to trying to level the series in Sydney.
"With Ricky being unavailable for this match we are sure that both Michael and Brad will lead this Australian side with great professionalism and the full support of the team as we strive for a victory in Sydney.
"We look forward to Ricky completing his recovery and leading this team to a fourth successive ICC Cricket World Cup on the sub-continent at the completion of the Australian summer.
"Usman Khawaja will make his debut for Australia in this match, something we are excited about given his tremendous form at domestic level over the past two seasons.
"The unfortunate injury to Ryan Harris during the fourth Test has provided the opportunity for Doug Bollinger to return to the Australian squad.
"The final side will be decided after we have had the opportunity to assess the wicket and the conditions in the following days at the SCG."
The Australia squad will travel to Sydney on Friday with the first training session planned for Saturday morning.
Australia's 12-man squad to face England in the fifth Ashes Test in Sydney, beginning on January 3:
Michael Clarke (c), Brad Haddin (vc), Doug Bollinger, Michael Beer, Phillip Hughes, Ben Hilfenhaus, Mike Hussey, Mitchell Johnson, Usman Khawaja, Peter Siddle, Steven Smith, Shane Watson.
Source: ESPNstar.com
Michael Clarke