The Aussies kicked off their Grand Slam tour with a victory over England atTwickenham Stadium last weekend and will be hoping to stay on track when they meet O'Driscoll and co in Dublin.
O'Driscoll, who starred for the Lions on the last three southern hemisphere tours and led Ireland to a Six Nations clean sweep earlier this year, has been selected ahead of fellow Lions Paul O'Connell, Donncha O'Callaghan and Ronan O'Gara, all of whom have plenty of leadership experience of their own.
Explaining his reasons for keeping the 30-year-old Leinster centre as his leader, Irish coach Kidney said: "Paul O'Connell has captained the Lions and captained Munster quite well and Donncha O'Callaghan and Ronan O'Gara have both led the Lions.
"In Brian's case, he brings a lot of experience to the job and he is motoring well at the moment. So, we just felt it prudent to pick him.
"It has been a long time since we were together, some six or seven months, so, for continuity and for a whole host of reasons really, we decided to stay with him."
O'Driscoll picked up the first of his 39 victories as Irish captain against Australia way back in 2002 when he led his country for the first time in Dublin. Since then, he has lost twice and won another against the Wallabies as captain.
While that game at the old Lansdowne Road, exactly seven years ago today, was his first outing as skipper, he took over the role full-time in 2004.
"Brian was delighted to retain the captaincy and that is the thing - he really is as excited about it as ever," added Kidney.
"If anything, his enthusiasm for the job is growing and that is a great thing because it feeds into the team."
Kidney has reduced his squad for the game against the Wallabies to 31 from his original selection of 39, with a total of 13 2009 Lions tourists involved plus Tomas O'Leary and Jerry Flannery, who were both forced to withdraw from the summer tour of South Africa due to injury.
Ireland Squad (v Australia)
Tommy Bowe (Ospreys), Bob Casey (London Irish), Tom Court (Ulster), Sean Cronin (Connacht), Leo Cullen (Leinster), Gordon D'Arcy (Leinster), Ian Dowling (Munster), Keith Earls (Munster), Stephen Ferris (Ulster), Luke Fitzgerald (Leinster), Jerry Flannery (Munster), John Fogarty (Leinster), John Hayes (Munster), Cian Healy (Leinster), Jamie Heaslip (Leinster), Denis Hurley (Munster), Felix Jones (Munster), Rob Kearney (Leinster), Denis Leamy (Munster), John Muldoon (Connacht), Donncha O'Callaghan (Munster), Paul O'Connell (Munster), Mick O'Driscoll (Munster), Brian O'Driscoll (Leinster, Captain), Ronan O'Gara (Munster), Tomas O'Leary (Munster), Eoin Reddan (Leinster), Niall Ronan (Munster), Jonathan Sexton (Leinster), David Wallace (Munster), Paddy Wallace (Ulster)
Bold denotes player slected for the Lions