Australia's defence department has been monitoring the Chinese navy vessels -- a frigate, a cruiser and a supply tanker -- since they were spotted last week.

Albanese said the fleet had on Friday alerted Australian officials that it may start conducting live fire drills, and that ships and planes should steer clear.

"This is activity that has occurred in waters consistent with international law," Albanese said.

"There has been no imminent risk of danger to any Australian assets or New Zealand assets, and that's why this notification occurs."

Foreign Minister Penny Wong earlier voiced concern over the exercises.

"We will be discussing this with the Chinese," she told national broadcaster ABC from Johannesburg where she was attending a G20 meeting.

Australia's air safety agency warned commercial flights to alter their course after receiving "reports of live firing in international waters".

"As a precaution, we have advised airlines with flights planned in the area," government agency Airservices Australia said in a statement.

"We are also working together to coordinate advice to operators and pilots."

Qantas and its subsidiary budget airline Jestar temporarily adjusted some flights between Australia and New Zealand, industry sources said.

Virgin Australia was also heeding the advice, while Air New Zealand said it had "modified flight paths as needed to avoid the area".

- Close watch -

Although the ships were sailing in international waters, Defence Minister Richard Marles has described their presence as "unusual".

"We are keeping a close watch on them, and we will make sure we are watching every move," he told Sky News on Thursday.

"It's not unprecedented. But it is an unusual event."

The ships were reportedly within 150 nautical miles (around 280 kilometres) of Australia's mainland earlier this week.

Canberra rebuked Beijing last week for "unsafe" military conduct, accusing a Chinese fighter jet of dropping flares near an Australian air force plane patrolling the South China Sea.

Beijing swiftly hit back, accusing the Australian plane of "violating Chinese sovereignty and endangering Chinese national security".

It was the latest in a string of tense encounters between China and Australia in the increasingly contested airspace and shipping lanes of the Asia-Pacific region.

A Chinese fighter jet was accused of intercepting an Australian Seahawk helicopter in international airspace in 2024, dropping flares across its flight path.

In 2023, a Chinese destroyer was accused of bombarding submerged Australian navy divers with sonar pulses in waters off Japan, causing minor injuries.