Marsh's recall just three months after being sent back to grade cricket for drinking during the Champions League in South Africa is the first step to rescuing his international career.
The recall is reward for his starring role in the Big Bash League and could lead to one-day international and Test appearances.
Australia's chief selector John Inverarity revealed six changes to the squad which reached the semi-final of last October's World T20 tournament for the opening game with Sri Lanka in Sydney on Saturday and the second match in Melbourne two days later.
Marsh is joined by Aaron Finch, Adam Voges, Ben Cutting, James Faulkner and Ben Laughlin, who was the highest wicket-taker in the BBL with 14 for Hobart Hurricanes.
Melbourne Stars veteran David Hussey has missed out on the squad to face Sri Lanka, Brad Hogg's international career is over and Cameron White and Dan Christian were also left out after making the World T20 squad.
Marsh topped the BBL scoring list with 412 runs at an average of 58.85 and Inverarity said he could also add to his seven Tests.
"(Marsh's) form in the BBL has been absolutely compelling," said Inverarity in quotes carried on the Cricket Australia website.
"He's batted brilliantly and we all know how well he can play when he's in a good space and he seems to be in a very good space at the moment."
Australia T20 squad: George Bailey (capt), Ben Cutting, Xavier Doherty, James Faulkner, Aaron Finch, Ben Laughlin, Shaun Marsh, Glenn Maxwell, Mitchell Starc, Adam Voges, Matthew Wade, David Warner.
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