Macquarie University will migrate staff email and calendars from Gmail to Office 365 by the end of the year.
The shift was revealed in a message from the university's chief information officer, Mary Davies.
"Data security is our top priority at Macquarie University, and following a decision made by Google to move our stored data from Europe to the United States, we initiated a market search to look at alternative options," the notice states.
The university selected Office 365. Some 90 university staff participated in a six-month trial of the software.
Earlier this year Microsoft announced it had begun on-shore hosting for Office 365 and Dynamics CRM Online in Australia.
That news followed Microsoft's launch last year of a local region for its Azure cloud computing platform.
Davies said that the university's IT staff were not able to give a precise date for the migration because of ongoing analysis and design work.
Although email and calendaring will move to Microsoft, university staff will retain for now Google accounts and access to Google Apps, the CIO's message said.
In 2016 there will be a review of Google Apps, the CIO wrote.
In addition to Outlook and Office 365 Pro Plus, staff will have access to cloud storage platform One Drive and Skype for Business