Gross domestic product (GDP) shrank 7% in the April-to-June quarter compared to the previous three months.
This is the biggest fall since records began back in 1959 and comes after a fall of 0.3% in the first quarter.
An economy is considered to be in recession if it sees two consecutive quarters of negative growth.
Australia was the only major economy to avoid a recession during the 2008 global financial crisis - mainly due to demand from China for its natural resources.
At the start of this year, the economy was hit by falling economic growth due to an extreme bush fire season and the early stages of the coronavirus outbreak.
More recently the shutdowns of businesses across the country have taken their toll, despite measures by the government and central bank to support the economy.
This is the worst economic growth in 61 years due to a severe contraction in household spending on goods and services.
2020 will go down as a year to remember and a year everyone is already trying to forget! It's the year Australia technically lost its famous nickname as 'The Lucky Country' and fell into recession for the first time in almost three decades.
GDP figures from the Australian Bureau of Statistics have shown that the economy shrank by 7% in the last three months as a result of the coronavirus pandemic.
For young people who have recently joined the work force, this is something they've never experienced before. Australia has had a steady economy growth for decades with strong coal, iron ore and natural gas exports to a surging China. Tourism has also been a big driver of growth.
But this year, the country was hit hard. Twice. When the bushfires ravaged through more than 12 million hectares, tourism was bashed and thousands of small business lost months of essential seasonal revenue. Then the coronavirus became a global pandemic. Australia closed down its borders and imposed strict social distancing rules.
Nearly 1 million people lost their jobs as a result. I remember watching the long queues outside social and financial support offices back in March with people dazed at finding themselves in this situation perhaps for the first time in their lives.
There's also an increasingly tense relationship with China, Australia's biggest trading partner. Australia has strongly and publicly backed a global inquiry into the origins of the coronavirus in April which infuriated the Chinese government. Since then, Canberra and Beijing have exchanged political jabs and the Australian economy has felt the pinch.
Scott Morrison's government has already pumped more than A$200bn (£110bn; US$147bn) in economic stimulus. Australia has fared better than many other nations around the world in controlling the virus and in subsequent economic slump but this country of abundance will have to face a much harsher reality for a few years to come.
But the coronavirus pandemic has been a major blow to the Australian economy, although the figure is slightly better than the 8% fall Australia's reserve bank had earlier forecast.
Despite the severe drop in economic activity, Australia is doing better than most other advanced economies that have experienced bigger downturns.
The US economy, the world's biggest, shrank 9.5% between April and June while the UK's shrank by 20.4% pushing it into recession as well.
France's economy fell by 13.8% and Japan's by 7.6%.