The Aussie foursome, anchored by James Magnussen, posted a new Games record of 3:14.92, recapturing the title they lost to South Africa on home turf in Melbourne four years ago.
Canada went out strongly in the first leg with Brent Hayden, who came second and third in the 50m and 100m freestyle respectively in the Pan Pacifics, with England and South Africa just off the pace.
Australia's Olympic 100m freestyle silver medallist Eamon Sullivan got his side back on terms in the second leg, with Tommaso D'Orsogna holding off the challenge from England's Grant Turner and South Africa veteran Roland Schoeman.
England's Adam Brown, though, turned first with 50m to go but Magnussen came back at him to clinch victory.
Australia were keen to snatch back the gold after South Africa stopped their unbeaten run of six titles in 2006.
400 Freestyle Relay Results
1. Australia (Kyle Richardson, Eamon Sullivan, Tommaso D'Orsogna, James Magnussen), 3:13.92.
2. England (Simon Burnett, Liam Tancock, Grant Turner, Adam Brown), 3:15.05.
3. South Africa (Graeme Moore, Gideon Louw, Roland Schoeman, Darian Townsned), 3:15.21.
4. Canada, 3:17.99.
5. Scotland, 3:20.70.
6. India, 3:27.14.
7. Northern Ireland, 3:27.92.
8. Singapore, 3:30.71.