The 25-year-old Serb kicks off his title defence with a first round tie against unseeded Frenchman Paul-Henri Mathieu in the draw announced on Friday and faces no major hurdles until a potentially dangerous quarter-final against fifth-seeded Czech Tomas Berdych.
In a top half of the draw free of 'Big Four' rivals Roger Federer, Andy Murray and the absent Rafa Nadal, a possible semi-final clash with fourth seed David Ferrer, looms for five-times Grand Slam winner Djokovic, who beat the tenacious Spaniard in the quarter-finals last year.
"I think realistically, three can win," Australia's former Wimbledon champion Pat Cash said at the draw, referring to Djokovic, second seed Federer and third-seeded Murray.
"You've got to say Novak, you'd expect him to be the favourite ... but Andy Murray is hitting his peak."
Former world number one Federer faces a tough first week in his bid to add to his record 17 Grand Slam titles, however.
The four-time champion will also play an unseeded Frenchman in Benoit Paire in his opener, but is likely to face former top-10 player Nikolay Davydenko of Russia in the second round before another potentially tricky clash with local hope Bernard Tomic in the third.
Big-serving Milos Raonic of Canada, the 13th seed, is then an unpalatable prospect in the last 16, with athletic Frenchman Jo-Wilfried Tsonga a good chance to meet the Swiss in the quarter-finals.
U.S. Open champion Murray will start his campaign against unseeded Dutchman Robin Haase but the Briton is likely to have one eye on Argentina's Juan Martin del Potro, who looms as a possible quarter-final opponent.
The towering Del Potro, who upset Federer to win the 2009 U.S. Open but has since struggled with injuries, shapes as a big threat to Murray's hopes of a second Grand Slam title after enjoying a solid season in 2012 with four titles.
In the women's draw, Serena Williams will start her bid for a sixth Melbourne title against Romania's Edna Gallovits-Hall, with a potential quarter-final clash against former Wimbledon champion Petra Kvitova.
The 31-year-old Williams, raging favourite to win her 16th Grand Slam singles title and third in a row after her Wimbledon and U.S. Open triumphs last year, would then be in line for a showdown with defending champion Victoria Azarenka.
Azarenka cried off their scheduled semi-final at the Brisbane International last week, blaming an infected toe from a bad pedicure, which critics suggested was tactical. Williams won the title.
"(The toe) is much better," she said at the draw, held under a hot sun on the banks of Melbourne's Yarra river.
"I've been practising for the last couple of days and it feels good, so I'm really happy that it's all gone and behind me."
Top seed Azarenka plays another Romanian, Monica Niculescu, in her first round with former world number one Caroline Wozniacki a potential quarter-final opponent.
Second seeded Russian Maria Sharapova faces a perilous first week, with a likely third round encounter against Venus Williams following her opening match against compatriot Olga Puchkova.
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