Sanchez set Chile on their way early on, the Barcelona star turning provider 70 seconds later to set up Jorge Valdivia.
Tim Cahill pulled one back before half-time with Wigan Athletic's Jean Beausejour grabbing a third for Chile in injury time of a pulsating encounter under the Arena Pantanal's floodlights.
But following Spain's 5-1 rout by the Dutch earlier in Salvador, the reigning champions almost certainly must beat Chile in Rio on June 18th to avoid an ignominious early exit.
The 12th minute opener came after sterling work by Charles Aranguiz in the Australia box, the midfielder's efforts resulting in the ball landing at Sanchez's feet, spelling danger for an Australian defence all at sea.
The prolific striker did not let the opportunity slip, clipping the ball right-footed past keeper Mat Ryan.
Among those celebrating in the 20,000-strong Chilean support were Manchester City manager Manuel Pellegrini, and the country's president Michelle Bachelet.
Two minutes later the Aussie backline was once again found wanting.
The perfect start then for a Chile side that arrived in Brazil with huge ambitions to make a real impact for the first time since finishing third on home soil in 1962.
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