Melbourne: Sebastian Vettel won a thrilling duel with world champion Lewis Hamilton to steal the season-opening Australian Formula One Grand Prix in Melbourne on Sunday.

The four-time world champion got the jump on the Mercedes ace off a miscalculation on the pit stop under Virtual Safety Car conditions and held off Hamilton for his second straight win in Melbourne and third overall.

Ferrari team-mate Kimi Raikkonen held off Australian Red Bull racer Daniel Ricciardo to take third and join Vettel on the podium.

"Nice one, nice one altogether," Vettel said jubilantly over team radio.

"We're getting there. We still have some work to do, but we're getting there."

It was Vettel's 48th win in his 200th GP and follows his earlier wins in Melbourne in 2011 for Red Bull and last year for Ferrari.

Hamilton, starting off the pole, got out his car and looked a bit bewildered as he removed his helmet, wondering how exactly that race got away from him.

Vettel pitted for a new set of softs and emerged from the pits ahead of Hamilton, gaining around 10 seconds thanks to the deployment of the Virtual Safety Car (VSC).

"What just happened guys? Was that my mistake?" Hamilton said on team radio as a full-on safety car was sent out as the marshals struggled to remove the stranded Haas car of Romain Grosjean.

"We thought we were safe, but there's obviously something wrong," the team told Hamilton.

Mercedes potentially miscalculated the VSC minimum speed during the phase Vettel claimed the lead.

Vettel retained his lead as the race was restarted and built a lead of seven-tenths of a second over Hamilton mid-race.

Hamilton made an error as he locked up at turn nine and fell 2.8 seconds behind Vettel with 11 laps remaining.

Vettel proved too resilient and held on as Hamilton backed off over the final laps realising he could not catch the flying German.

Two-time world champion Fernando Alonso was fifth in his McLaren ahead of Red Bull's young Dutchman Max Verstappen.

"Well done guys, very proud of you. Long winter, long seasons in the past but now we can fight, we can fight," Alonso said over the team radio.