Australia's men will have to get through Canada, the USA and Scotland in their Sydney 7s pool.
The Sydney pools were drawn after the conclusion of the Cape Town tournament, where Australia finished ninth and won the Challenge Trophy.
Australia had the USA in its South African pool, going down 31-14, but will be hoping for a better showing in their home tournament, where they have performed beyond expectations in recent years.
There will be some blockbuster pool matches in other Sydney 7s pools as well, with New Zealand and Fiji set to go head-to-head in Pool A, drawn with Samoa and Russia.
Argentina and France are the top dogs in Pool B, with the South Americans having made it to the Cup final in Cape Town, making for a tough assignment for Wales and Kenya in Pool B.
South Africa and England will face off in Pool C, as the Blitzboks look for some redemption after missing out on the Cape Town crown.
Spain and a 16th team, yet to be determined, will round out that pool.
The Sydney 7s kicks off on January 26, with men's and women's competitions to be run over three days. Tickets available at ticketek.com.au/sydney7s.
Sydney 7s men's pools