Contracts were also not renewed for Marcus North, James Hopes, Shaun Tait, Andrew McDonald, Clint McKay and Adam Voges.
Melbourne: Veteran opener Simon Katich has been dropped from Australia's list of 25 centrally contracted players as selectors move to give emerging young talent more opportunities in international cricket.
Marcus North was also among the seven players who didn't have their Cricket Australia contracts renewed and was not on the list issued on Tuesday. The others were James Hopes, Andrew McDonald, Clint McKay, Shaun Tait and Adam Voges.
Usman Khawaja, the 24-year-old Pakistan-born opener who made his Test debut for Australia in January, earned his first full contract and his fellow New South Wales state opener Phillip Hughes retained his place on the list.
The 2011-2012 group included seven players who didn't earn a full contract last season, with two young pacemen — 18-year-old Patrick Cummins and 21-year-old James Pattinson — included for the first time.
Cummins, a big right-arm fast bowler, has played just three first-class matches and six Twenty20s for New South Wales and turned 18 last month.
Spinners Xavier Doherty and Jason Krejza and all-rounders John Hastings and David Hussey also won contracts.
While 35-year-old Katich lost his place, the 36-year-old pair of Ricky Ponting and Mike Hussey retained their places.
Ponting was retained as a specialist batsman after quitting as Test and one-day captain following Australia's disappointing World Cup quarterfinal defeat to India and handing the reins over to Michael Clarke.
Katich injured his Achilles tendon in the second Test of Australia's Ashes series loss to England in December and his international career now appears to be over after scoring 4,188 runs in 56 Tests.
"Simon has been a fantastic player for Australia and a key and successful member of the Test team in recent years," Cricket Australia's selection chairman Andrew Hilditch said. "However, amongst other matters, (selectors) felt it was the right time now to start blooding our next opening partnership in preparation for the Ashes two years from now.
"While some difficult decisions have been made, (Cricket Australia) is very excited by the list chosen and in particular the addition of youth from both batting and bowling disciplines. We are confident these young players, in combination with our established senior players, will play a key role in ensuring Australian cricket returns to its rightful position as a leader in world cricket."
Brett Lee was retained as a limited-overs bowler despite speculation he would retire after the World Cup.
Players on central contracts earn a minimum retainer of 200,000 Australian dollars.
CA contracted players: Doug Bollinger, Michael Clarke, Patrick Cummins, Xavier Doherty, Callum Ferguson, Brad Haddin, Ryan Harris, John Hastings, Nathan Hauritz, Ben Hilfenhaus, Phillip Hughes, David Hussey, Michael Hussey, Mitchell Johnson, Usman Khawaja, Jason Krejza, Brett Lee, Shaun Marsh, Tim Paine, James Pattinson, Ricky Ponting, Peter Siddle, Steven Smith, Shane Watson, Cameron White.