He laid a wreath at the Tomb of the Unknown Australian Soldier in Canberra before officially reporting for duty.
He also presented a letter from the Queen in which she wrote that her grandson would "benefit greatly" from spending time with Australian troops.
The prince, called Captain Wales in his military role, will leave the British army in June after 10 years' service.
During his placement in Australia, he will patrol with Aboriginal soldiers and train with the country's special forces.
He officially reported for duty to Air Chief Marshal Mark Binskin, Chief of the Defence Force, after laying his wreath and placing a poppy during a tour of the Australian War Memorial.
He also presented the Queen's letter, in which she wrote: "I am delighted that the long and enduring association between the Australian and British armies will be joined by the military secondment of my grandson, Prince Harry.
"Together, our armed forces share skills, resources and resolve in order to uphold and defend our common values.
"In 2015, when together we commemorate the many sacrifices of our countrymen at Gallipoli a century ago, it is fitting that we can also reflect on the strength and persistence today of those common values and our professional military ties.
"I know that Captain Wales will benefit greatly from spending time with the Australian Diggers [soldiers] and I thank you for welcoming him into your ranks."
The Australian military has said the placement will be "challenging and hectic", and the prince has said he is "tremendously looking forward" to it.
The placement will be briefly interrupted when he travels to Turkey later this month for commemorations to mark the allied campaign at Gallipoli in 1915, in which thousands of soldiers from Australia and New Zealand were among the dead.
It is believed that the prince will do voluntary work for charities later in the year as he considers his future options.
Prince Harry has arrived in Australia for a four-week placement with the Australian Defence Force.