The team was given a rousing reception at the official welcome home ceremony at Sydney airport on Wednesday morning following the long flight from London.
About 500 guests - including Prime Minister Julia Gillard, Opposition Leader Tony Abbott, friends, family and a large media contingent - packed into a hangar at the airport to greet the athletes after they touched down at 7.15am (AEST).
Australia won 35 medals at the London Games, comprising seven gold, 16 silver and 12 bronze, leaving it 10th overall on the medal table.
It's the lowest number of gold medals the country has won at an Olympics since the Barcelona Games in 1992 where Australia also won seven.
But Ms Gillard defended the team's medal haul.
"For those who have been quick to rush out with criticism, London 2012 has been a remarkable result by any measure," she told the crowd.
"Our nation is still in the top 10, still fighting, still striving."
Australia's Olympic flag bearers - sailor Malcolm Page and basketballer Lauren Jackson - were the first to step off the Qantas jet, followed by the gold, silver and bronze medallists and other members of the 410-strong team.
Ms Gillard shook hands with the athletes as they disembarked, while a children's choir sang the Peter Allen classic I Still Call Australia Home.
Chef de mission, Nicholas Green, singled out cyclist Anna Meares and hurdler Sally Pearson, who both won gold medals on August 7, as one of the Games' most memorable moments.
"The golden double ... What a day it was," he said to much applause and flag waving from the crowd.
While proud of the team's performance, Green said the focus was already turning to Rio 2016.
"All of us look forward to having a rest and then starting to prepare for Rio in four years time," he said.
London bronze medallist Jackson said it was great to receive such a warm welcome home.
"It's amazing," she said.
"Seeing all the support here is awesome... We're happy we did so well over there."
London 2012 was Jackson's fourth Olympics but the veteran did not indicate if she would compete at the next Olympic Games in Rio in 2016.
Sailor Iain Jensen, who arrived wearing the gold medal he won in the 49er skiff class with Nathan Outteridge, said he was happy to be back on home soil.
"It's been a great experience but it's very draining," Jensen, from the NSW town of Wangi Wangi told AAP.
"It'll be nice to have a bit of a relax and have a surf with some of my mates."
Meanwhile, three-time Olympian, swimmer Libby Trickett, says there is always something special about flying home after a Games.
"It's certainly a flight I've done a thousand times before, but it's made so much more meaningful at the end of an Olympic journey," she told AAP.
"It's the end of this four years and it's a culmination of everything that's gone into it."