Marin Cilic has set his sights on a permanent spot in the grand-slam picture after falling to defeat at the final hurdle on the biggest stage to Roger Federer again at the Australian Open.

Croatian Cilic was on the wrong end of more Federer mastery, going down 6-2 6-7 (5-7) 6-3 3-6 6-1 to the Swiss great in over three hours on Rod Laver Arena.

It was a more competitive showing for Cilic than his blister-ruined defeat to Federer in last year's Wimbledon final - the big-serving right-hander fighting back when the game looked up in the fourth and fifth set - only for the now 20-time grand-slam champion to prove too strong.

With Federer's traditional major rivals - Rafael Nadal, Novak Djokovic and Andy Murray - all suffering for fitness, there are spots open to challenge at the top, which Cilic has outlined as an ambition for the remainder of 2018.

"First of all, big congratulations to Roger and his team, it's amazing what you guys do year after year," Cilic said.

"It was an amazing journey for me to come to the final, it could have been best two weeks of my life but today was a tough match. I had a slight chance at the beginning of the fifth but Roger played great [in the] fifth set.

"I want to thank my team, you were unbelievable these two weeks.

"We started this year amazingly well, we worked hard for it, and hopefully we're going to reach many grand slam finals and lifting these trophies in the future."

Cilic will jump to a career-high third in the world after his latest final run, and Federer took time to congratulate his beaten foe on the career milestone.

The Swiss said at his trophy presentation: "Another great tournament [for Cilic]. World number three - that's a hell of an achievement. Keep doing what you're doing and you'll achieve a lot more."