The Joeys entered the clash full of confidence after scoring 13 goals in their past two games - a stark contrast to their first two outings where they were held by Myanmar and thrashed by Vietnam.
While coach Tony Vidmar made some changes to his starting XI, his side needed at least a point to ensure qualification through to the semi-finals and the youngsters showed their clear intent from the opening whistle.
Jacob Italiano put Australia Under-16 ahead in just the fifth minute, benefitting from Malaysia Under-16 goalkeeper Mohd Fadhil's parry, before sending his left-footed finish into the back of the net off the post.
But their joy was short-lived as Malaysia Under-16, who entered the match equal on points with the Joeys, hit back in the 29th minute through Nizaruddin Bin Jazi.
Although the Joeys dominated possession in the first-half, it wasn't until early in the second stanza that they took control of the contest.
John Roberts, captain on the night, was the star of the show - bagging three of the Joey's six second-half goals.
His hat-trick was complemented by Lachlan Brook's 63rd minute powerful strike, and a Malaysia own goal, before Italiano bagged a brace of his own seven minutes from time to complete the rout.
The Joeys finished second in Group A on 10 points from their five matches, and will face Group B winners Thailand in the semi-finals on Thursday night (AEST).