The recall issued on Tuesday will affect 245 Yaris Cross hybrid SUVs sold between October 2022 and April 2023, and will see Toyota replace the vehicles' tyres.
The recall comes one week after the High Court cleared another vehicle brand, Mitsubishi, of breaking Australian consumer law in claims its cars used more fuel than indicated on a mandatory label.
It also comes after the Australian Automobile Association revealed most of the vehicles tested for fuel consumption used more than indicated.
The Department of Transport issued the recall for Toyota's Yaris Cross GR Sport vehicles after the manufacturer identified the issue.
The department noted the recall had not been caused by a safety risk but meant the vehicle did not meet Australian regulations.
"The tyres fitted to vehicles within this production range do not meet the Australian Design Rule 81/02 requirements and may result in increased fuel consumption than is indicated on the fuel consumption label," the recall said.
In a statement, Toyota Australia said the company would replace the tyres on the affected vehicles without charge and would contact owners by phone, email or post.
"Tyre replacement will take approximately two hours, however, depending on the dealer's work schedule, owners may be required to make the vehicle available for a longer period of time," the company noted.
Yaris owners who purchased a vehicle within the time period are asked to contact a local Toyota dealer.
The vehicle's fuel consumption is currently estimated at 3.8 litres for every 100 kilometres.
The unusual recall comes one week after Mitsubishi won its appeal against claims it had broken consumer law by failing to accurately measure the fuel consumption of one of its vehicles.
The High Court ruled in favour of the automaker after a four-year battle launched by a Melbourne man who claimed his vehicle used more fuel than it showed on the label.
The Australian Automobile Association has tested the real-world petrol and diesel consumption of vehicles as part of a $14 million program funded by the federal government.
The first results from the program, released in November, showed more than half of the nine vehicles tested used more fuel than lab tests indicated.
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