Australia have set Sri Lanka a target of 393 runs to win the first Test match in Hobart.
The home team finished their second innings on 278 runs at close of play at tea on the fourth day, with Michael Hussey remaining unbeaten on 31.
The Assies resumed on 146-2 after lunch, but Phillip Hughes and Shane Watson both fell in quick succession, before Matthew Wade too departed.
Captain Michael Clarke brought some stability to Australia's batting and scored 57 runs, before he left the ground with a hamstring injury and was forced to retire hurt.
Ben Hilfenhaus will be unable to bowl for Australia with a side strain.
