Pakistan were in early trouble after Australia called a halt to their massive first innings at 538 for eight on the second day of the third Test in Sydney on Wednesday.

At tea, Pakistan were 16 for two with debutant Sharjeel Khan and Babar Azam dismissed in one Josh Hazlewood over.

Hazlewood had Sharjeel caught by Matt Renshaw at slip for four and four balls later Babar was leg before wicket for nought.

Younis Khan had yet to score and Azhar Ali was on 12 at the interval.

Peter Handscomb joined in the Australian run spree as the third centurion before skipper Steve Smith declared.

It was Handscomb's second century in just four Tests to join David Warner (113) and Renshaw (184) in another huge Australia innings against the beleaguered tourists.

Handscomb was out in bizarre circumstances when he went back deep in his crease to cut Wahab Riaz only for his bat to dislodge the leg-bail and he was given out hit wicket for 110.

Handscomb, brought into the Australian team with Renshaw in a shake-up after the Hobart Test debacle against South Africa in November, batted for 205 balls in 319 minutes.

Matt Wade made 29 before he was caught sweeping Azhar and upon Mitchell Starc's dismissal for 16, skipper Smith called a halt, giving his bowlers 25 minutes at the Pakistan batsmen before tea.

Hilton Cartwright hit the highest score by an Australian number six this season with 37 before he was bowled by Imran Khan.

The Zimbabwe-born all-rounder, brought in for his Test debut at the expense of Nic Maddinson, looked solid during his 97-ball stay.

The previous highest score batting six season was Mitchell Marsh's 26 against South Africa in Perth in November.

Renshaw's epic knock ended inside the first half-hour Wednesday when he played paceman Imran Khan on to his stumps.

The 20-year-old rookie's first century in his fourth Test came off 293 balls with 20 fours in 413 minutes. He shared in a 142-run stand with fellow newcomer Handscomb.

Pakistan were showing the gruelling effects of the back-to-back Boxing Day-New Year Tests with Amir and leg-spinner Yasir Shah nursing leg injuries and paceman Wahab Riaz leaving the field holding his right side.