The agency saw off TBWA\London, McCann Erickson and Mustoes to win the pitch, which was overseen by the Haystack Group. Grey's MediaCom affiliate will take over media planning and buying from BJK&E.
The creative account moves from Delaney Lund Knox Warren & Partners, which declined to repitch.
Grey's task will be to refine the Australian Tourist Commission's £150 million global brand campaign, which broke in Britain last month, for key European markets. However, Nicola Mendelsohn, Grey's deputy chairman, said: "We have a remit to produce new creative work."
The advertising is intended to build on the number of UK arrivals to Australia, which hit a record 673,000 last year and is expected to rise by a further 5 per cent this year. Numbers of European visitors are predicted to grow by an average of 4.5 per cent until 2013.
The global campaign has been created by Whybin\TBWA in Sydney under the theme "Australia. A different light". It signals a move away from traditional picture-postcard advertising and "shrimp on the barbie" imagery.
Tourism chiefs say the country's distance from many of its main tourism markets means that it needs a more compelling and emotional message to lure visitors.
Dave Alberts, Grey's Australian chairman, said: "The ATC is one of the most exciting brands in the world".