Erratic paceman Mitchell Johnson was a big winner as one of a streamlined 17 players awarded a Cricket Australia contract, but Test opener Ed Cowan missed out.
CA sliced its centrally contracted players list from 25 to 17 under a new agreement with the players' union, but with the ability to upgrade others if their performance warranted.
Johnson, 30, has not played for Australia in any form of the game since November last year due to a foot injury, while Cowan, national Twenty20 captain George Bailey, Clint Mackay and Daniel Christian were the big losers.
One-day specialist David Hussey kept his contract, despite having yet to play a Test match.
Australia's selectors on Friday said the contracts were awarded on the form over the past 12 months; their likelihood of being selected for Australia in any form of the game during the next 12 months and the weighting for Tests over one day internationals and in turn T20.
Chief selector John Inverarity said his panel had faith that Cowan and Bailey could still be awarded a contract with improved performances.
"Naming just 17 players initially, with the ability to upgrade others, as and when performance warrants, ensures a tighter alignment between current performance, recognition and reward," Inverarity said in a statement.
"There are a number of very good and highly regarded players who the panel have considerable faith in -- and hopes for -- who didn't, on this occasion, make the cut for the contract list of 17.
"Ed Cowan, George Bailey, Peter Forrest, Clint McKay, Dan Christian and some others come readily to mind.
"The expectation is that a handful of names will be added to the list as the season unfolds and upgrade points are accrued by those players representing Australia in the various formats of the game."
Under a new pay agreement signed with the Australian Cricketers' Association, the minimum CA retainer contract is worth $Aus230,000 ($230,000), with performance payments, including $Aus14,000 for a Test match (up from $Aus13,400 last season), $Aus5,600 ($Aus5,360) for an ODI and $Aus4,200 ($Aus4,020) for a T20.
Australia's 2012-13 contracted list - Michael Clarke, Patrick Cummins, Xavier Doherty, Brad Haddin, Ryan Harris, Ben Hilfenhaus, David Hussey, Michael Hussey, Mitchell Johnson, Nathan Lyon, James Pattinson, Ricky Ponting, Peter Siddle, Mitchell Starc, Matthew Wade, Shane Watson, David Warner.