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The World No1, who had declined to reveal his vaccination status, said previously that he was unsure whether he would compete at the January 17-30 tournament in Melbourne due to concerns over Australia's quarantine rules.
"I've spent fantastic quality time with my loved ones over the break and today I'm heading Down Under with an exemption permission. Let's go 2022," the Serbian said on Instagram.
Organisers Tennis Australia (TA) had stipulated that all participants at the Grand Slam must be vaccinated against the novel coronavirus or have a medical exemption granted by an independent panel of experts.
The panel would consist of doctors from the fields of immunology, infectious disease and general practice and that the move was agreed in conjunction with the Victoria Department of Health.
TA said the 34-year-old Djokovic had applied for a medical exemption which was granted after a "rigorous review process" involving two separate independent panels of medical experts.
"One of those was the Independent Medical Exemption Review Panel appointed by the Victorian Department of Health," TA said in a statement.
"They assessed all applications to see if they met the Australian Technical Advisory Group on Immunisation (ATAGI) guidelines."
It added the process included the redaction of personal information to ensure privacy for all applicants.
A Victorian state government confirmed the exemption, telling the Herald Sun newspaper that any player granted one would have gone through a two-stage process to verify they have a medical condition that meets the criteria for an exemption.
"I'm ready to live and breathe tennis in the next few weeks of competition. Thanks everyone for the support," Djokovic added in his post, which was accompanied by a picture of him in an airport.
Australian Open tournament director Craig Tiley said in the TA statement that "fair and independent protocols" had been established for assessing medical exemption applications to ensure the Australian Open was safe.
"Central to this process was that the decisions were made by independent medical experts and that every applicant was given due consideration," Tiley said.
The exemption, however, was questioned by British doubles player Jamie Murray, who said that he was unlikely to get one if he were in Djokovic's place.
"I think if it was me that wasn't vaccinated I wouldn't be getting an exemption... but well done to him for getting clear to come to Australia and compete," he said after the doubles rubber against Canada in the ATP Cup.
"At the end of the day you kind of have to trust that he does has a valid reason for the medical exemption."
Djokovic heads to Australia having trained in Marbella, Spain over the last few days.
Djokovic has won a record nine Australian Open titles, including the last three, and is in a three-way tie on 20 majors with Roger Federer and Rafael Nadal in the all-time list.