It brings the country close to breaking the Netherlands’ record of modern-era uninterrupted economic growth.
Australia’s economy had contracted in the third quarter but the surprise 1.1% rise pulled the annual figure back to a 2.4% growth rate.
The recovery was attributed largely to strong exports and consumer spending. Mining and agriculture enjoyed relatively strong growth in the three months to December.
Iron ore and coal are Australia’s biggest exports and reduced demand from China has cooled a mining boom and hurt the Australian economy.
Australia has not had a recession – defined as two consecutive quarters of negative growth – since June 1991, BBC reports.
It is now just one quarter short of the Dutch record set between 1982 and 2008. Australia is heavily dependant on global commodity prices
Treasurer Scott Morrison welcomed a 2% rise in business investment in December – the first rise after a dozen quarters of decline.
Estimates by the country’s central bank point to economic growth rising to about 3% for 2017 on the back of recovering commodity prices.