Kate left audiences in awe with her emotional entry song, Zero Gravity, a ballad which SBSB host Joel Creasey described as "pop genius".
The 37-year-old singer-songwriter earned the spot by winning the first ever Australia Decides competition on Saturday evening, held at the Gold Coast Convention and Exhibition Centre, which saw 10 Australian acts perform for the public vote (conducted through text message) and before a panel of judges.
Miller-Heidke, wearing a silver dress and a shiny headpiece, performed her operatic pop song "Zero Gravity", which is about overcoming postnatal depression.
Despite the singer putting on a stellar performance and giving it her all at the song contest final in Portugal, she came in at number 20, right behind the Netherlands and Serbia.
By tradition, the Eurovision finals are held in the country of origin of the previous year's victor.
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Nogales, a city of about 20,000 people, is largely reliant on Mexican shoppers and cross-border trade. Entry to the USA was not affected.
Rice, who was voted into the finals of You Decide by judges Rylan Clark-Neal, Mollie King and Martin Humes, will automatically be put through to the finals of Eurovision as the United Kingdom are part of the big five - meaning that they are one of few countries that don't have to compete in the semi-finals.
It will be the 64th edition of the Eurovision Song Contest.
Britain has not won Eurovision since "Love Shine a Light" by Katrina & the Waves triumphed in 1997-before Rice was born.
The Top 10 acts competing in "Eurovision - Australia Decides". "The Queensland Government supported the event through Tourism and Events Queensland and we wish Kate the performance of a lifetime in Tel Aviv".
Australia has participated four times at Eurovision since 2015, taking second-place in 2016 with Dami Im's song, Sound of Silence.