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The 32-year-old Paine, who played the last of his four Tests in October 2010, has been included in a 13-man squad for the opening two Tests, replacing the out-of-form Matthew Wade and denying Peter Nevill a spot.
In peculiar circumstances, Paine has not been considered the premier wicketkeeper for his state side Tasmania, with Wade taking the gloves in the domestic Sheffield Shield.
Paine comes into Steve Smith's side after scoring a half-century against England and keeping for the Cricket Australia XI in the tour match in Adelaide.
"Tim was identified as an international player a long time ago and has always been renowned as a very good glovesman, also performing well for us whenever he has represented Australia in any format," said selector Trevor Hohns.
"His batting form in recent outings for the Cricket Australia XI and Tasmania has been good."
Pundits were quick to query the decision.
"(If) he's meant to be the best keeper then you'd think at least he'd make the Tasmania one," said former Test bowler Brendon Julian. "I just don't get where that's come from, that's just a left-field selection."
Playing as a frontline batsman, Paine also scored an unbeaten 71 against Victoria in the Sheffield Shield this week.
"It's been a hard road to get back here and I'm extremely proud of the way I've gone about things in the last five-six years," Paine said.
"I feel like I'm probably more ready now than I was when I played (before), certainly more mature. I know my game a bit better.
"I've been lucky enough to be around an international cricket team before so I know what to expect so I feel like I'm in a good place for it."
Uncapped Western Australian Cameron Bancroft replaces 10-Test Renshaw as David Warner's opening partner after scoring a mountain of Shield runs in the leadup to the first Test in Brisbane starting next Thursday.
Renshaw has been in poor form for Queensland but the 21-year-old's omission is certain to be polarising given his solid performances in the last home summer.
The Yorkshire-born opener smashed 184 against Pakistan in his last Test on home soil at the Sydney Cricket Ground in January.
Bancroft scored an unbeaten 228 against South Australia this week and was unlucky to miss out on a Test debut two years ago when the 2015 tour to Bangladesh was cancelled over security concerns.
Selectors also sprung a surprise by recalling batsman Shaun Marsh while leaving out incumbent number six Glenn Maxwell.
The injury-prone 34-year-old Marsh has been in decent form for Western Australia but averages a modest 36 in Tests and has never cemented his place despite plenty of chances since his 2011 debut against Sri Lanka.
Jackson Bird and the uncapped Chadd Sayers have been selected as the back-up bowlers to the formidable pace trio of Mitchell Starc, Josh Hazlewood and Pat Cummins.
With the quick turnaround between the Gabba opener and the second match in Adelaide, the first day-night Ashes Test, Sayers could make his debut under lights on his home wicket. to give one of the other seamers a rest.
"It's no secret that Chadd's inclusion is with a view to the Adelaide Test match," said Hohns. "I'm not suggesting for one moment that he'll be already included (in the match)."
The airline first flagged the problems it is grappling with due to spare parts shortages in January this year