Malcolm Turnbull has welcomed new citizens to Australia's embrace, saying they honoured the country by choosing to become part of it.
"Most of us were tiny conscripts to Australian citizenship; our oath of allegiance an indignant howl as we emerged blinking into the light of our first day," the prime minister told the group on the shores of Lake Burley Griffin in Canberra.
"But you have made a choice, not just to live among us but to become one of us."
Mr Turnbull said each of the new citizens "adds another thread to the national tapestry" of a history stretching back more than 40,000 years.
He spoke of his own family's migrant story and said the nation was enriched by the cultures of all its citizens.
The prime minister administered the oath to 28 new citizens at the event in Canberra, which also included an official flag raising and Indigenous smoking ceremony.
Millions of Australians are set to turn out to more than 800 official events, as well as backyard barbecues and beach picnics, across the country to mark the national day.
Prime Minister Malcolm Turnbull said in his Australia Day message it was a chance to celebrate what Australians love about their country.
"We come from nearly 200 countries of all faiths, cultures and backgrounds. And yet in a world where conflict and intolerance seem more intractable than ever, we live together in peace," he said.
He also acknowledged the First Australians whose culture "enriches us all".
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Queensland scientist Professor Alan Mackay-Sim was named Australian of the Year at a ceremony at Parliament House on Wednesday night.
His research played a key role in restoring mobility to a quadriplegic man.
The senior award went to the Northern Territory educator, Sister Anne Gardiner, and the Young Australian of the Year is South Australian fashion designer Paul Vasileff.
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The Local Hero award went to Victorian cancer campaigner Vicki Jellie.
National Australia Day Council chief Chris Kirby said the number of events registered for this year was a record.
An indigenous ceremony at Barangaroo was held in Sydney before the Australian and Aboriginal flags are raised on the Harbour Bridge.
The NSW governor has acknowledged pain and mixed emotions that January 26 evokes within Australia's Aboriginal people at an indigenous ceremony on Sydney Harbour.
Governor David Hurley told the crowd of several hundred at Barangaroo Point Reserve that Australians had the opportunity to write a different story through reconciliation and hard work.
"We understand on this day 229 years ago the coming of the First Fleet wreaked a terrible impact on your people, your families, your culture," General Hurley said at the Thursday morning ceremony.
His speech followed the earlier ceremonies including the passage of a canoe carrying fire from Goat Island for a smoking ceremony.
Just after 8am both the Australian and Aboriginal flags were raised in unison on the Sydney Harbour Bridge.
Aboriginal elder Aunty Jacinta Tobin performed her song translated as Let's Sing up Good Dreaming, while 250 voices joined in a choral piece that recognised country, ancestors and healing.
Gen Hurley said the 1967 referendum to include Aboriginal people in the census was the beginning of a journey to equality that had not yet finished.
People wearing Australian flag hats watch the Ferrython race on Sydney Harbour during Australia Day celebrations in in Sydney, Thursday, Jan. 26, 2017. (AAP) Source: AAP
"Like everyone here and everyone around Australia I am keen for the work that started in 1967 to be completed sooner rather than later, in whatever form it takes," Gen Hurley told the crowd.
"This is hard, but let's do it, and let's be an example of having done it ... let's make good dreaming."
Melbourne hosted a parade through the CBD, with people from over 90 community and cultural groups.
More than 16,000 people become new citizens at ceremonies across the country.
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