The Pliocene was characterized by a gradual shift of global climate toward cooler and drier conditions. This shift fundamentally reorganized Earth's climate from the Miocene state toward conditions similar to the present. During the Pliocene, the progressive restriction of the Indonesian Throughflow (ITF) is suggested to have enhanced this shift toward stronger meridional thermal gradients. Reduced ITF, caused by the northward movement of Australia and uplift of Indonesia, impeded global thermohaline circulation, also contributing to late Pliocene Northern Hemisphere cooling via atmospheric and oceanographic teleconnections. Here we present an orbitally tuned high-resolution sediment geochemistry, calcareous nannofossil, and X-ray fluorescence record between 3.65 and 2.97 Ma from the northwest shelf of Australia within the Leeuwin Current. International Ocean Discovery Program Site U1463 provides a record of local surface water conditions and Australian climate in relation to changing ITF connectivity. Modern analogue-based interpretations of nannofossil assemblages indicate that ITF configuration culminated similar to 3.54 Ma. A decrease in warm, oligotrophic taxa such as Umbilicosphaera sibogae, with a shift from Gephyrocapsa sp. to Reticulofenestra sp., and an increase of mesotrophic taxa (e.g., Umbilicosphaera jafari and Helicosphaera spp.) suggest that tropical Pacific ITF sources were replaced by cooler, fresher, northern Pacific waters. This initial tectonic reorganization enhanced the Indian Oceans sensitivity to orbitally forced cooling in the southern high latitudes culminating in the M2 glacial event (similar to 3.3 Ma). After 3.3 Ma the restructured ITF established the boundary conditions for the inception of the Sahul-Indian Ocean Bjerknes mechanism and increased the response to glacio-eustatic variability.