Race directors announced the change only two hours before the start and after previously cutting the race from 27 to 26 laps.
The move came after Bridgestone engineers said they were unable to guarantee the safety of their rear slick tires beyond 10 laps because of greater than expected tire degradation caused by the circuit's abrasive new tarmac.
Riders were instructed they would have to pit for bike changes on either the ninth or 10th laps of the race while also running harder compound tires throughout.
Lorenzo pitted at the end of the 10th lap but the 20-year-old rookie Marquez, who started from the front row on a Honda, continued for another circuit before pitting at the end of lap 11. Marquez was then disqualified as were Australian riders Bryan Staring and Damian Cudlin who also pitted outside the specified window.
The disqualification of Marquez allowed Lorenzo to claim his sixth win of the season, his 29th Grand Prix victory and the 50th premier race victory of his career. After breaking the lap record to qualify in pole position, he became the first rider other than the now-retired Casey Stoner to win at Phillip Island since 2006.
"We practiced the bike changes a lot and that was one of the keys to the victory," Lorenzo said. "I was slow in warmup and we had to change some things.
"We changed the strategy and made some improvements. I was so fast in the race but Marc (Marquez) and Dani (Pedrosa) were really quick too."
Marquez had needed to take eight more points than Lorenzo from the race to clinch the championships.
Pedrosa's second placing kept alive his title chances while Rossi narrowly beat Cal Crutchlow and Alvaro Bautisata in a thrilling contest for third.
The series concludes with the Japan Grand Prix next weekend and the Grand Prix of Valencia on Nov. 2.
Spain's Pol Espargaro reclaimed the lead in the Moto2 championships when injury ruled Britain's Scott Redding out of race reduced to 13 laps because of similar fears over tire wear.
Redding, the long-time championship leader, was ruled out of the race with a fractured left wrist after crashing during qualifying on Saturday. In his absence, Espargaro claimed his fifth pole of the season and led from lights to flag to win at Phillip Island for the second consecutive year.
The win gave him the championship lead for the first time since the season-opening race in Qatar. Thomas Luthi pushed Espargaro all the way, finishing second and only half a second behind.
"Today, I think, was the greatest day of my life," Espargaro said. "I was fighting all the season, a lot of races, thinking about the championship and finally we got here."
Alex Rins won the Moto3 race by 0.003 of a second from Maverick Vinales and both riders decreased the championships lead of pole-sitter Luis Slalom who finished third. Rins has won three of the last four grands prix to match Salom on six wins for the season.
In a thrilling race, the top seven riders were covered by just over one second.
-AP