The American powerhouse, bidding for a 23rd Grand Slam crown at the tournament starting in Melbourne on Monday, faces dangerous former world number seven Belinda Bencic of Switzerland in the opening round.

Second seed Williams, who lost the top ranking to Kerber last year, could then encounter in-form Briton Johanna Konta in the fourth round and Slovak sixth seed Dominika Cibulkova in the quarters.

She could potentially then meet her US Open conqueror Karolina Pliskova in the semi-final of the bottom half of the draw.

Williams' drop to world number two was triggered by her shock defeat to Pliskova at Flushing Meadows last year, which also denied her the chance to better Steffi Graf's 22 Grand Slam victories.

Pliskova is seeded to meet two-time Melbourne Park semi-finalist Agnieszka Radwanska in the quarter-finals.

World number one Kerber is seeded for a last eight clash with Spanish seventh seed and French Open champion Garbine Muguruza in the top half of the draw.

Kerber, who beat Williams to win the first of her two Grand Slams last year in Melbourne, starts with a first-round clash against Ukraine's Lesia Tsurenko.

Winning the Australian Open in 2016 sparked a memorable season for the German, who followed it up by claiming the US Open.

She has two potential testing opponents early in her campaign with a re-match against Russian teen Daria Kasatkina, who upset her in this week's lead-up Sydney International.

The 19-year-old Russian, ranked 26, shocked Kerber 7-6 (7/5), 6-2 in a second-round match played in sweltering conditions.

Former Wimbledon finalist Eugenie Bouchard, who rediscovered some form at the Sydney International in reaching the semi-finals, is another potentially in Kerber's way.

Romania's world number four Simona Halep opens with a match against American Shelby Rogers and could face a quarter-final against either Ukraine 11th seed Elina Svitolina or experienced Russian eighth seed Svetlana Kuznetsova.