The German cruised to his 43rd race victory with a 9.9 second gap to Mercedes' runner-up Lewis Hamilton, with the Briton's new team mate, Valtteri Bottas, finishing third.
[AUSTRALIA GP BLOG: Vettel victorious, Ricciardo loses his smile]
It was Vettel's fourth win for Ferrari and his first since the Singapore Grand Prix in September 2015. That win in Singapore was also the last time Ferrari had topped the podium but Vettel's victory at Albert Park underlined the huge leap in performance made by the team, who were encouraged by their cars' pace and reliability in winter testing.
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Vettel, with four world titles under his belt and now a 43rd Grand Prix win, said:
Unbelievable, thank you everyone it’s a fantastic Grand Prix. Its what we needed, the whole team has been working so hard, the guys didn’t get much sleep here or in the factory and the car is so much fun to drive
[DRIVER REACTION: Hamilton - we've got a race on our hands!]
Mercedes chief Toto Wolff told the BBC:
Today we were not quick enough and Sebastian was a deserved winner. We weren't quick enough, the tyre was degrading... it’s a good wake-up call
However, Wolff would not concede that the power balance has shifted significantly in F1: "After the first race you cannot talk about a new world order."
Vettel's 2007 championship-winning team mate Kimi Raikkonen finished fourth, with Red Bull's Max Verstappen one behind.
Vettel, who started alongside pole-sitter Hamilton, had said after qualifying he hoped for a good start to reel in Mercedes. Hamilton got away smoothly and having broke clear of Vettel, was first to pit on lap 18 to change tyres.
However, it proved a turning point in the race as he rejoined behind Red Bull's Max Verstappen and was then unable to pass the feisty Dutch teenager, Hamilton venting on the team radio as Vettel forged ahead.
The German pitted at lap 23 and exited the pit-lane just in front of Verstappen, who was still gamely holding off Hamilton.
Mercedes motorsport head Toto Wolff was enraged, with television pictures showing him pounding his fist into a desk in the team garage.

Vettel beats Hamilton into second for opening win in Australia

Image credit: AFP

Vettel showed the reigning constructors' champions a clean set of heels and quickly established a six-second gap, which widened as the race went on.
It was a tough day for Red Bull's home racer Daniel Ricciardo, who started off with a five-grid penalty for a gearbox change and then had to retire with smoke billowing from his car on turn three midway through the race.
In between, his car came to a stop on the way to lining up at the starting grid and he was forced to join the race from pit-lane two laps behind after frantic work in the garage to fix a sensor problem with his gearbox.
Six other cars failed to finish, including McLaren's twice champion Fernando Alonso and Renault's Jolyon Palmer.
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