Due to population growth, climatic change, and growing water usage, water scarcity is expected to be a more prevalent issue at the global level. The situation in Australia is even more serious because it is the driest continent and is characterized by larger water footprints in the domestic, agriculture and industrial sectors. Because the largest consumption of freshwater resources is in the agricultural sector (59%), this research undertakes a detailed investigation of the water footprints of agricultural practices in Australia. The analysis of the four highest water footprint crops in Australia revealed that the suitability of various crops is connected to the region and the irrigation efficiencies. A desirable crop in one region may be unsuitable in another. The investigation is further extended to analyze the overall virtual water trade of Australia. Australia’s annual virtual water trade balance is adversely biased towards exporting a substantial quantity of water, amounting to 35 km3, per trade data of 2014. It is evident that there is significant potential to reduce water consumption and footprints, and increase the water usage efficiencies, in all sectors. Based on the investigations conducted, it is recommended that the water footprints at each state level be considered at the strategic level. Further detailed analyses are required to reduce the export of a substantial quantity of virtual water considering local demands, export requirements, and production capabilities of regions.