Conor Murray has been selected at scrum half in place of Isaac Boss, and will have his provincial colleague Ronan O'Gara alongside him at half-back.
Hooker Rory Best and prop Mike Ross return to the starting front row, while Paul O'Connell resumes in the second row at the expense of Leo Cullen, who captained Ireland to victory over Russia.
The final change sees Stephen Ferris named in the back row instead of Donnacha Ryan, who is listed among the replacements.
Commenting on the selection of the half-backs, head coach Declan Kidney said: "Ronan and Conor went well in the last 20 minutes against Australia. Ronan went well against Russia as well.
"This is the right combination for us against Italy. They've played a few times together now. Ronan has been place kicking well, but if Jonathan Sexton was starting on Sunday it wouldn't worry me.
"I'd hate to go down the road that we're picking Ronan because of his place-kicking. He's too good a player to be saying that about him, while Johnny's place-kicking is not of concern to me."
He added: "Everyone was talking about the Australia game coming into the World Cup, but in our minds we always knew Italy was the big one. Australia was the attractive one to win, Italy was the necessary one to win.
"The law of averages said Australia would beat Italy in the first match. Unless you do a New Zealand and get 15 points from your first three games it was always going to come down to this.
"England and South Africa find themselves in the same situation - three wins from three, yet they are also in cup final situations."
IRELAND Team & Replacements (v Italy, 2011 Rugby World Cup Pool C, Otago Stadium, Sunday, October 2, kick-off 8.30pm local time/8.30am Irish time):
15 - Rob Kearney (UCD/Leinster)
14 - Tommy Bowe (Ospreys)
12 - Gordon D'Arcy (Lansdowne/Leinster)
11 - Keith Earls (Young Munster/Munster)
10 - Ronan O'Gara (Cork Constitution/Munster)
9 - Conor Murray (Garryowen/Munster)
1 - Cian Healy (Clontarf/Leinster)
2 - Rory Best (Banbridge/Ulster)
3 - Mike Ross (Clontarf/Leinster)
4 - Donncha O'Callaghan (Cork Constitution/Munster)
5 - Paul O'Connell (Young Munster/Munster)
6 - Stephen Ferris (Dungannon/Ulster)
7 - Sean O'Brien (Clontarf/Leinster)
8 - Jamie Heaslip (Naas/Leinster)
16 - Sean Cronin (Leinster)
17 - Tom Court (Malone/Ulster)
18 - Donnacha Ryan (Shannon/Munster)
19 - Denis Leamy (Cork Constitution/Munster)
20 - Eoin Reddan (Lansdowne/Leinster)
21 - Jonathan Sexton (St. Mary's College/Leinster)
22 - Andrew Trimble (Ballymena/Ulster)
Follow the Ireland team in New Zealand on www.twitter.com/irfurugby.