Australia won the final IT20 of the Commbank IT20 Tri-Series to see England eliminated on net run-rate.
At the half-way stage England would have been confident of success after an impressive bowling performance restricted the hosts to 132/7, but Australia's spinners utilised a slow, used track very well to win by 16 runs.
Defeat means Heather Knight's side will not participate in the Tri-Series final on Wednesday - instead playing against a Cricket Australia XI - but there were positives despite the result, with spinners Sophie Ecclestone and Sarah Glenn again bowling with great control.
After Wednesday's match England will take part in two ICC Women's T20 World Cup warm-up matches (New Zealand, March 16 & Sri Lanka, March 18) before their tournament proper gets underway on March 23 against South Africa at Perth.
Heather Knight: "It's disappointing because that was probably our most complete bowling peformance. All of the bowlers bowled really well, we kept them under pressure throughout and took wickets at key times.
"We never really had a batter in and Australia utilised the conditions really well. We want to be aggressive but they made it hard for us.
"I think it's a defeat we should be able to learn a lot from, and in general I think it's been a decent tri-series for us. We've had a chance to fine-tune some things, and at times we've seen good performances with both bat and ball.
"It's been good preparation, it's obviously annoying to miss out on run-rate but it's all about improving and being ready for the World Cup proper"