Background Acute gastroenteritis illness is a common illness that causes considerable morbidity, but current estimates of the cost to the Australian healthcare system are unknown. Objective To estimate the current healthcare utilisation and direct public healthcare system costs attributable to acute gastroenteritis illness in Australia. Methods This is an incidence-based cost-of-illness study focused on quantifying direct health care costs using a bottom-up approach. Data on general practitioner consultations, prescribed medications, diagnostic tests, specialist consultations, emergency department visits and hospital admissions were collected from national reports. Results Using 2016 prices, the estimated annual direct per capita cost of acute gastroenteritis illness was AUD$14.87 (USD$10.71), equating to AUD$20.27 (USD$14.59) per case. The estimated overall economic burden in Australia was AUD$359 million (USD$258 million; AUD $1.5 million per 100,000 people). The major contributors to this cost were hospital admissions (57.1%), emergency department visits (17.7%), and general practitioner consultations (14.0%). Children under five years of age have the highest per capita rates of acute gastroenteritis illness; however, service utilisation rates vary by age group and both young children and older adults accounted for a substantial proportion of the overall economic burden attributable to acute gastroenteritis illness. Conclusions Although chronic diseases comprise a large cost burden on the healthcare system, acute illnesses, including acute gastroenteritis illness, also impose substantial direct healthcare system costs. Providing data on current cost estimates is useful for prioritizing public health interventions, with our findings suggesting that it would be ideal if targeted interventions to reduce hospitalisation rates among young children and older adults were available.