The Pakistan-born lefthander has struggled since he was promoted to the Australia batting order at number three in the current Ashes series.
Khawaja, 26, has managed just 114 runs in six innings at an average of a mere 19 against England in this Ashes series.
In nine Tests since his debut over 18 months ago, he has scored 377 runs at 25.13 with two fifties.
Khawaja joins recently upgraded players Chris Rogers and Steve Smith on the CA contracts list.
The fifth Test starts at The Oval in London on Wednesday. England have already won the series and retained the Ashes.