The 22-year old soldier died when a bomb exploded in southern province of Uruzgan where Australian troops were preparing to search a suspected Taliban base.
Another soldier was also seriously injured during the mission, Air Chief Marshal Angus Houston told reporters.
The explosion left three Afghan civilians wounded including a child, he added.
Houston acknowledged that 15,000 Australian soldiers stationed in Afghanistan are in a dangerous and difficult situation.
“We are engaged in a very, very challenging campaign,” Houston said. “I should remind everyone that fighting will become more fierce as the summer continues.”