The 33-year-old leg-spinner left his home in the border region near Afghanistan to come to Australia on a short-stay visa to play cricket in 2010 and has established his credentials at the Melbourne Renegades in the T20 Big Bash League.
He was selected for the one-day match on January 29 alongside Pakistan-born Usman Khawaja and Indian-born fast bowler Gurinder Sandhu.
National Selection Panel chairman John Inverarity described the picks as reflecting the cultural diversity that exists in Australian cricket.
"Fawad is playing for the Melbourne Renegades in the T20 Big Bash League and grade club Melbourne University, and we are encouraged by his ongoing development," Inverarity said.
"We have also been very pleased with the progress of Indian-born fast bowler Gurinder Sandhu, who has performed well for the Sydney Thunder following strong performances for Australia in last year's Under 19 World Cup."
Ricky Ponting, who recently retired from international cricket, captains the team, with former Test wicketkeeper Brad Haddin his deputy.
Ahmed has previously said he was targeted by extremists in Pakistan because of his involvement in cricket, even receiving death threats because of the perception that the sport promotes Western values.
PM's XI: Ricky Ponting (capt), Brad Haddin, Fawad Ahmed, Jono Dean, Alex Doolan, James Faulkner, Peter Handscomb, Usman Khawaja, Kane Richardson, Gurinder Sandhu, Ashton Turner, Nick Winter (12th man).
COMMENTS (3)
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@Badshah: do you know his full life story? were you his neighbor? unless you know all the facts stop making petty presumptions and let this guy celebrate his newfound success
Nice try... targetted by extremists because he wanted to play cricket... lol... cant believe it worked... good for you
Good on ya mate, since extremists are now far and away, you must play cricket extremely well.