UPDATE: MICHAEL Clarke is out but not before scoring yet another century.
And Shane Watson is still waiting for his first Test hundred since October, 2010 after holing out for 83 (198 balls, eight fours and a six), The Australian reports.
Deep into the second session Australia was 5-315 with Mike Hussey and Matthew Wade newly arrived at the crease.
Clarke was earlier caught at second slip for 106 (187 balls, 14 fours).
The Clarke-Watson partnership of 194 stretched Australia's lead beyond 150 after Sri Lanka was bowled out for 156 on day one of the Second Test at the MCG.
Clarke's third century of the summer - and his first in a Test at the MCG - came on the tick of drinks in the afternoon session when he hooked Dhammika Prasad to the fine leg rope.
Clarke broke Ricky Ponting's mark of 1544 runs, set in 2005, with a gentle push to mid-on just before lunch to move to 56.
Both batsmen had lives just before the break. Stand-in keeper Kumar Sangakkara missed an awkward stumping from Clarke and Mahela Jayawardene dropped a sharp Watson chance at slip in the same Rangana Herath over.
Later Clarke went from 83 to 87 with an edge from Herath that slid harmlessly between first slip and the keeper on its way to the boundary.
Sri Lanka can ill afford such misses after losing one of its frontline bowlers early in the day.
After 30 minutes play Chanaka Welegedara pulled up in his delivery stride and grabbed for his right leg.
He has left the ground for scans on what is believed to be a strained hamstring.
The injury is a hard blow to an attack that is struggling to contain the hosts on a flattening pitch.
Resuming on 3-150, with Clarke on 20 and Watson 13, the Australians moved to 3-238 at the lunch break.
Dropped on five last evening - a difficult chance to Sangakkara made more difficult by a first slip posted too wide - Watson appears determined to make the most of his luck.
He has played mostly in the V and struck a majestic off-drive to the rope to move into the 20s.
In the second hour he came down the wicket to Herath and lifted the spinner into the Members' sight-screen.
Watson brought up his 50 with a brutal pull shot to the square leg rope, in doing so overtaking Clarke on the scoreboard.
In the next over he swept to the fence, prompting Jayawardene to take out a close catcher in favour of a defensive man in the deep.
Australia is one-up in the three Test series.
Read more at The Australian.