Marc Marquez took out the Australian MotoGP as Jorge Lorenzo gained much-needed ground on Valentino Rossi on Sunday.

The Spanish Honda rider went past Lorenzo on the final lap at Phillip Island to win an enthralling race for his fifth victory of the season.

Finishing behind Marquez was Lorenzo by 0.2 seconds, while Andrea Iannone held off Rossi down the straight for third.

The win was Marquez's first in Australia, even with his title chances over.

For Lorenzo, he closed to within 11 points of Rossi in the championship with two races remaining.

Lorenzo, who started third, led at the end of lap one and he eventually pulled clear of his rivals, while Iannone hit a seagull.

The gap at the front was over a second before Lorenzo was reeled in and made to fight, with Marquez going ahead thanks to a move on turn four with 10 laps to go.

But three laps later and Lorenzo was back ahead before slowly extending his advantage at the front.

Marquez produced a flying final lap and made the crucial move at turn 10, going past Lorenzo to clinch victory.