By Agence France-Presse
Some 700 kilos (1,543 pounds) of the drug with an estimated street value of Aus$245 million (US$186 million) were intercepted Wednesday about 100 kilometres (62 miles) north of Sydney, they said.
Three men, alleged to have ties with Tahiti and Thailand, were arrested.
Australian police worked with authorities in Tahiti, where the vessel passed through before entering Australian waters.
"It is no surprise that criminal syndicates undertake sophisticated attempts that go to great lengths -- even crossing oceans in relatively small craft -- to import narcotics," Australian Federal Police assistant commissioner Neil Gaughan said in a statement.
"This is nothing more than an attempt to flood our streets with dangerous narcotics to make a profit, with police, health professionals and the community picking up the bill for all the peripheral damage they will cause," he said.
Further arrest warrants have been issued in Thailand, he added.
With its high street prices, Australia is an attractive destination for drug smugglers.
In August, police said the French navy intercepted a yacht bound for Australia with 1.46 tonnes of cocaine aboard. The boat was seized in the Pacific after setting sail from South America.