McGrath is well placed for her first game in senior Australian colours since her Test debut in the Women's Ashes in 2017.
The talented allrounder has risen as a leader in recent times both with the Strikers and Statewide Super SA Scorpions, and she represented Australia A in their series against India in December.
Earlier this year, McGrath was rewarded her first national contract for an outstanding 2019-20 season, including a strong all-round rebel WBBL|05 campaign that featured 327 runs and 14 wickets.
Schutt maintains her position as Australia's strike bowler, and will hope to continue her form after the Women's T20 World Cup success.
The two sides will play three One-Day Internationals and three Twenty20 Internationals, with the coveted Rose Bowl Trophy up for grabs during the ODI series.
Australia is the current holder of the Rose Bowl having defeated New Zealand 3-0 in their last encounter in 2019.
The schedule for the series has matches in both New South Wales and Queensland but given the current COVID situation changes may be required. Cricket Australia will continue to work with relevant authorities and advise any changes.
Speaking on the selection of the squad, National Selector Shawn Flegler said:
“We’ve selected a slightly larger squad than usual because of a number of COVID-related considerations and, with no matches leading in, players have been picked on performances both for Australia and Australia A over the last 12-to-24 months.
“Tahlia is in the mix to play her first match for Australia in a few years. She’s an extremely talented batter and up-and-coming leader so we look forward to seeing what she can do throughout this series.
"While there’s a host of experienced players in the squad, we’ve kept a strong view on the future and it’s really exciting to see so many younger players putting their hands up for National selection."
Australia's squad for the Commonwealth Bank T20I and ODI series against New Zealand
Meg Lanning (c) (VIC), Rachael Haynes (vc) (NSW), Maitlan Brown (ACT), Erin Burns (NSW), Nicola Carey (TAS), Ashleigh Gardner (NSW), Alyssa Healy (NSW), Jess Jonassen (QLD), Delissa Kimmince (QLD), Tahlia McGrath (SA), Sophie Molineux (VIC), Beth Mooney (QLD), Ellyse Perry (VIC) *subject to fitness, Megan Schutt (SA), Molly Strano (VIC), Annabel Sutherland (VIC), Georgia Wareham (VIC), Belinda Vakarewa (TAS)