The account, worth an estimated AUS $20 million (£8.57 million), is currently handled by the Melbourne-based Mitchell & Partners.
The agency will repitch for the business against a number of undisclosed shops selected by the carmaker in conjunction with the London consultancy Audit Star.
Tom Noble, BMW's Australian marketing director, said: "The review is in no way a reflection on Mitchells. We periodically review our agency arrangements and this has been a request from headquarters."
The creative account, handled by Melbourne's Badjar Ogilvy, is unaffected.