The Turnbull government is concerned by reports that China has installed anti-ship cruise missiles and surface-to-air missile systems on three of its outposts in the South China Sea.
The move, if confirmed, would mark the first Chinese missile deployments in the Spratly Islands, where several Asian countries including Vietnam and Taiwan have rival claims.
Foreign Minister Julie Bishop said if the media reports are accurate, then the Australian Government would be concerned.
"This would be contrary to China's stated aspiration that it would not militarise these features," she told reporters on the Gold Coast.
"China, of course, has a unique responsibility as a permanent member of the Security Council, to uphold peace and security around the world."
She said any action to unilaterally militarise artificial islands in the South China Sea would go against that responsibility.
CNBC quoted unnamed sources as saying that according to US intelligence assessments, the missiles were moved to Fiery Cross Reef, Subi Reef and Mischief Reef within the past 30 days.
China claims most of the South China Sea, while Taiwan, Malaysia, Vietnam, the Philippines and Brunei claim parts of the waters.
With its rich fisheries and oil and gas potential, the South China Sea has been a source of contention for decades.
China has copped international criticism for its reclamation activities in the disputed territory.
Both Australia and the US are concerned about freedom of navigation across important trade shipping routes.