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Latu forced his way into contention following impressive form in the domestic National Rugby championship and replaces veteran hooker Tatafu Polota-Nau, who has also been battling an arm injury.
"It is disappointing for Tatafu, who has been one of the most consistent and valued members of our finishers off the bench, he needs time to get his body right and we respect that," coach Michael Cheika said in a statement.
"With injury comes opportunity, and this is the opportunity now for Tolu to make his step up to international rugby."
Latu has been in the Wallabies squad before but never played due to sustaining a broken arm.
Toulon winger Drew Mitchell and Western Force loose forward Ben McCalman have also been released after battling long-term injuries.
"We're happy with how Drew and Ben are progressing," Cheika added. "The best thing for both players is to play some regular rugby to get themselves back to full form and fitness."
Fiji-born Naivalu has been selected after he fulfilled his three-year residency requirement.
Prop Alan Ala'alatoa has also been named in the 30-man squad for the games in Pretoria on October 1 and London the following week, after he suffered a knee injury that kept him out of the 36-20 victory over the Pumas in Perth last Saturday (local time).
Ala'alatoa's absence in Perth allowed Tom Robertson to make his debut off the bench.
Scrumhalf Nick Frisby has also been named in the squad for the first time since the June series against England.
Forwards: Allan Ala'alatoa, Rory Arnold, Adam Coleman, Kane Douglas, Scott Fardy, James Hanson, Michael Hooper, Sekope Kepu, Tolu Latu*, Sean McMahon, Stephen Moore, Dean Mumm, Tom Robertson, Rob Simmons, Scott Sio, James Slipper, Lopeti Timani.
Backs: Quade Cooper, Israel Folau, Bernard Foley, Nick Frisby, Will Genia, Dane Haylett-Petty, Reece Hodge, Samu Kerevi, Tevita Kuridrani, Luke Morahan, Sefanaia Naivalu*, Nick Phipps, Henry Speight.
* uncapped player