Clarke - who suffered a hamstring injury in the first Test in Hobart last week - has been in doubt for the biggest day on Australia's cricket calendar. The skipper was put through his paces at training on Christmas Eve and came through unscathed, with coach Mickey Arthur expecting him to play.
"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 squad as a replacement for Ben Hilfenhaus after he 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 his country to victory with figures of five for 63 in the second innings at Blundstone Arena 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 - with Arthur confirming the newcomer, who has starred for Tasmania since crossing from his native New South Wales in 2011, would take the new ball.
"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."