The 23-year-old has been added to the original 31-man squad as cover for Joe Tomane who is battling a toe injury.
Morahan's only appearance for the Wallabies came when he started at full-back last summer when the Aussies suffered a shock 9-6 defeat to Scotland in Newcastle. Tomane also made his only appearance in that game.
Tomane has been ruled out of the first Test after he sustained his injury during training on Monday, the Australian Rugby Union said in a statement.
"An MRI scan... subsequently revealed a small toe fracture in his left foot," the statement said, adding that Tomane was expected to be fit for some part of the three-match series.
Morahan, who scored a brilliant individual try for the Reds in the side's 22-12 loss against the visitors at the weekend, will join up with the squad on Tuesday.
James Horwill was named skipper and Scott Sio became the fourth uncapped player to join the party when Australia coach Robbie Deans finalised his 31-man squad for the Lions series two days ago.
Deans announced the controversial elements of his squad selection on Sunday, ruling out the inclusion of fly-half Quade Cooper and welcoming Kurtley Beale back to the fold despite his battle with alcohol-related issues.
The other players included in the squad in addition to the 25 initially picked last month were lock Hugh McMeniman, fit-again winger Digby Ioane, centre Pat McCabe and utility forward Peter Kimlin.
The Lions travel to Brisbane to face the Wallabies on June 22 with further Tests in Melbourne and Sydney to follow.
Backs - Kurtley Beale, Berrick Barnes, Israel Folau, Digby Ioane, Nick Cummins, Joe Tomane, Luke Morahan , Adam Ashley-Cooper, Rob Horne, Pat McCabe, Christian Leali'ifano, James O'Connor, Will Genia, Nick Phipps.
Forwards - Wycliff Palu, Ben McCalman, Ben Mowen, Michael Hooper, Liam Gill, Dave Dennis, Peter Kimlin, Hugh McMeniman, James Horwill (captain), Rob Simmons, Kane Douglas, Ben Alexander, Sekope Kepu, James Slipper, Benn Robinson, Scott Sio, Stephen Moore, Saia Faingaa.