The 56-Test opening batsman and Marcus North were the notable omissions from the 25-player list, released by Cricket Australia.
The newcomers offered a central contract were Patrick Cummins, Xavier Doherty, John Hastings, David Hussey, Usman Khawaja, Jason Krejza and James Pattinson.
Chairman of selectors Andrew Hilditch said his panel felt it was opportune to initiate a new opening partnership in time for the next Ashes series against England in two years' time and there was now no room for 35-year-old Katich.
"Simon has been a fantastic player for Australia and a key and successful member of the Test team in recent years," Hilditch said.
"However, amongst other matters, the selectors' panel felt it was the right time now to start blooding our next opening partnership in preparation for the Ashes.
"The opening partnership is critical to the success of any team and takes time to develop the necessary experience at international level.
"We feel it is important this change is made now as we prepare for the challenges ahead."
Katich's demotion offers another chance for Phillip Hughes, 22, to open the Australian innings along with Shane Watson.
Young pacemen, Victoria's Pattinson, 21, and Cummins, 18, of New South Wales, were given their chance to regenerate Australia's fast bowling attack by gaining contracts.
"James has tasted international cricket and we see him as a young man of immense talent who is made of the right stuff to succeed at the higher level," Hilditch said.
"Patrick is an exceptional talent who has impressed with his opportunities to date for NSW and it will be very exciting to watch his progress."
Senior batsman Ricky Ponting, 36, and Mike Hussey, 36, retained their contracts with Hilditch saying he envisioned them mentoring the younger players coming through.
Spinners Doherty and Krezja were added to the contract list along with off spinner Nathan Hauritz and leg spinner Steven Smith.
Batsman Khawaja, 24, who made his Test debut in last summer's failed home Ashes series, also received his first full contract.
"We see him as a very important player for the future of Australian cricket," Hilditch said.
Others not to have their contracts renewed for next season were James Hopes, Andrew McDonald, Clint McKay, Shaun Tait and Adam Voges.
"The next 12 months is a very important period in Australian cricket," Hilditch said.
"It will undoubtedly be a tough and demanding period as we play three of the worldG??s top four Test nations during away series against Sri Lanka and South Africa and home series against New Zealand and India.
"However we see it as a very exciting opportunity to commence regaining Australia's leading position in world cricket."
Contract list: Doug Bollinger (NSW, 29), Michael Clarke (NSW, 30), Patrick Cummins (NSW, 18), Xavier Doherty (TAS, 28), Callum Ferguson (SA, 26), Brad Haddin (NSW, 33), Ryan Harris (QLD, 31), John Hastings (VIC, 25), Nathan Hauritz (NSW, 29), Ben Hilfenhaus (TAS, 28), Phillip Hughes (NSW, 22), David Hussey (VIC, 33), Michael Hussey (WA, 36), Mitchell Johnson (WA, 29), Usman Khawaja (NSW, 24), Jason Krejza (TAS, 28), Brett Lee (NSW, 34), Shaun Marsh (WA, 27), Tim Paine (TAS, 26), James Pattinson (VIC, 21), Ricky Ponting (TAS, 36), Peter Siddle (VIC, 26), Steven Smith (NSW, 22), Shane Watson (NSW, 29), Cameron White (VIC, 27)
-AFP
Tags: sport, cricket, nsw, sydney-2000, wa, perth-6000 First posted June 7, 2011 15:57:00
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