Pacer Mark Wood and leg-spinner Adil Rashid were the pick of the English bowlers, with figures of 4/33 and 4/41 respectively as the visitors lost their last five wickets for 38 runs.
Earlier, a 96-run second wicket partnership between skipper Steve Smith (56) and Aaron Finch (68) helped Australia recover from the early loss of opener David Warner (21) after the Kangaroos were put in to bat.
Warner started off on a cautious note before losing his concentration and edging one back off Wood, who tested the southpaw with some immaculate line and length.
Warner's fall brought in his captain Smith, who along with Finch steadied the ship to take the visitors to the three-figure mark.
In the process, Finch got to his 50 off 47 balls and looked set for a big innings before an attempt to launch Ben Stokes misfired with English skipper Eoin Morgan completing a smart catch at mid-off.
Australia's decision to promote Moises Henriques to No.4 did not work out as the all-rounder could add only 25 runs for the third wicket with his skipper before falling to Rashid.
Smith also did not last long and fell immediately after completing his half century off 68 deliveries, which contained five hits to the fence.
Thereafter, Travis Head (71 not out) and Glenn Maxwell (20) added 58 runs for the fifth wicket before Maxwell failed to make the most of the life he got on the same score and became Wood's third victim.
Reeling at 239/5, Australia lost the remaining four wickets of Matthew Wade (2), Mitchell Starc (0), Pat Cummins (4) and Adam Zampa (0) within a span of 15 runs to lose the plot.
Towards the end, Head played a lone hand smacking Ball and Stokes out of the park twice to milk 19 runs off the final two overs with tailender Josh Hazlewood (1 not out) a mute spectator at the other end. Head's 64-ball innings was laced with five fours and two sixes.
Brief Scores: Australia 277/9 (Travis Head 71 not out, Aaron Finch 68, Steve Smith 56, Mark Wood 4/33, Adil Rashid 4/41) vs England.
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