Meeke was almost four tenths of a second faster than the rest of the field through the 3.44-mile stage and will now be the first to select his place on the road for the first of three days of gravel action in New South Wales.
Volkswagen's World Rally Championship leader Sebastien Ogier was second with M-Sport's Thierry Neuville third.
Northern Irishman Meeke, who drove for the Citroen Abu Dhabi team in Finland last month, said: "It's qualifying for one of the slipperiest gravel rounds of the championship - road position will be everything.
"Qualifying ultimate test of outright speed and to have this in only my second event in a DS3 WRC is nice."
Despite not driving the DS3 since he crashed out of Finland, Meeke made an immediate impression with fastest time in the first morning practice.
He then elected to run Michelin's soft tyre in second practice run, which gave him a good feeling with the tyre for qualifying.
"I had to adjust my style a little bit towards the end of the stage," he said, "the tyre was just starting to move about a little bit."
Meeke is expected to select a position near the back of the pack in the running order.
Ogier praised Meeke's effort saying: "I'm happy for him, he's a good guy and he's shown he has the speed - he already did this in Finland.
"But we all know, this is qualifying and it doesn't mean so much, now we have to get into the race."
Neuville's M-Sport team-mate Mads Ostberg feared he had collected a puncture mid-way through the stage.
"I hit a rock," said Ostberg. "I didn't see it, but there was a bang, it was quite a sharp hit. It was on the front-right wheel and the next corner was a left-hander, so I slowed down a little bit. There wasn't any damage, but OK, the time is done now."
Andreas Mikkelsen was an impressive fifth quickest for VW, with new co-driver Paul Nagle alongside.
Mikko Hirvonen and Evgeny Novikov were sixth and seventh respectively, while Jari-Matti Latvala struggled to find any balance from his Polo R WRC in eighth spot.
Rounding out the top 10 were Khalid Al-Qassimi and local driver Nathan Quinn in Motorsport Italia's Mini.