The Melburnian's McLaren appeared to catch the white paint on the way out of turn four, before careering into the barriers just 40 minutes out from race start.
The car was left with the front-right wheel hanging off the car and substantial bodywork damage, in a nightmare start to the 24-year-old's season.
With little time before lights out, his team were unable to repair the car for the start of the race.
"We've not seen anything on the data," McLaren CEO Zak Brown said on Sky Sports.
"We'll do a post mortem after the race. For now, we have to focus on the car we have in the race.
"It's disappointing for Oscar in his home race, but let's see what happens now.
"He'll be sore about that one for a while, but these race car drivers know how to recover quickly. He'll be back."
Piastri had qualified fifth for his home GP, after narrowly missing out on last year's championship.
The Mercedes pair of George Russell and Kimi Antonelli qualified on the front row, with Isack Hadjar and Charles Leclerc also ahead of him.
Teammate Lando Norris was set to start sixth, and radioed in after Piastri's crash to check if something had gone wrong with the Australian's car.
Piastri had been one of the few drivers not to go off track across practice and qualifying on Friday and Saturday, but chose the precise wrong moment for things to go wrong.
His crash continues a long run of horror stories for locals at Albert Park, with no Australian having ever reaching the podium.
Piastri had looked the best chance to do so last year after spending large parts of the race in second, before a sudden downpour left him going off track and needing to recover to ninth.
This weekend's grand prix was on track to bring in record crowds, with a stand named in Piastri's honour and fans in it decked out in green and gold.
However its placement means Piastri did not even pass it before his race was over.
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