Defending champion Federer will be looking to repeat his form of last year when he sealed his second Grand Slam by sweeping aside Marat Safin with a commanding straight-sets win.
He went on to win Wimbledon and the US Open as he secured 11 tournaments to finish the year with a win-loss record of 74-6 and as world number one for the first time.
Andy Roddick, who reached the semi-final in 2003, has been named as second seed. The American won four singles titles in 2004, was runner-up to Federer at Wimbledon and contested his first Davis Cup final.
Local boy Lleyton Hewitt is the third seed.
Andre Agassi, the four-time champion, looks set to miss out after pulling out of the Kooyong Classic with a hip injury.
The 34-year-old will now have an MRI scan to assess the extent of damage and his chances of participating in next week’s tournament.
Davenport tops the women’s seedings after finishing 2004 ranked world number one for the third time in her career.
She has reached the semi-final on four occasions and was crowned champion in 2000.
Last year Davenport was defeated by eventual champion Justine Henin-Hardenne in the quarter-finals but the Belgian is absent through injury this year.
Henin-Hardenne’s absence, along with that of compatriot Kim Clijsters and former champion Jennifer Capriati as well as Serena Williams’ lack of consistency, means this year’s tournament is wide open.
It could be the opportunity for former world number one Amelie Mauresmo to secure her first Grand Slam.
The seedings slots from third to sixth are filled by Russians and headed up by Anastasia Myskina, the French Open champion.
Wimbledon champion Maria Sharapova is fourth, Svetlana Kuznetsova, who won the US Open title, is fifth, while Elena Dementieva, who reached the finals of both the French and US Opens, is sixth.
2003 champion Serena Williams is seventh seed, one place ahead of sister Venus.