Two treaties with Hong Kong will be suspended in the wake of Beijing passing strict national security laws in the former British colony.
Senior official with the Attorney-General's Department Sue Robertson said the national security laws were inconsistent with the "one country, two systems" arrangement promised by China when it regained control of Hong Kong in 1997.
She said Australia had entered into treaties into Hong Kong on that basis, which had fundamentally changed with the passing of the laws.
An extradition treaty and mutual legal assistance agreement will be suspended.
"Hong Kong and Australia have enjoyed a strong record of co-operation between our law enforcement and justice agencies," Ms Robertson told a parliamentary inquiry on Thursday.
"However, it is in Australia's national interest to now suspend the operation of these treaties until the full implications of the national security law is clear."
The UK, Canada, the US, New Zealand, Germany and France have all recently suspended their extradition agreements with Hong Kong.
Australia told Hong Kong on July 9 it would suspend the extradition treaty, and Hong Kong sent its own correspondence on July 28 saying it would also suspend the mutual assistance treaty.
The diplomatic note provided no reason for the decision.
Australia has agreed to suspend it.
The national security laws criminalise subversion, secession and collusion with foreign forces in Hong Kong.
Pro-democracy protesters have since been charged for holding flags, posters and pamphlets.
The government is not only worried about the law eroding freedoms in Hong Kong but that they were passed without it directly participating.
Hong Kong media tycoon Jimmy Lai is the most high-profile person to be arrested and charged under the new regime.
There are seven active mutual legal assistance agreements on foot from Australia to Hong Kong.
They are effectively on hold with the treaty suspended.
Meanwhile, Chinese state media has claimed two Australian academics have been banned from visiting the nation despite the pair not applying for visas.
Clive Hamilton of Charles Sturt University and Alex Joske of the Australian Strategic Policy Institute have said they had already judged it too risky to travel to China anyway.
The reported bans come after Australia cancelled the visas of two Chinese academics, in the latest diplomatic stoush between the two countries.
China's foreign ministry, while not confirming the entry bans, said at a regular briefing on Thursday that Beijing had the right to bar any foreign national and it blamed Australia for difficulties in relations, Reuters reported.
"We firmly oppose any acts to deliberately attack China, endanger China's national security, or spread disinformation under the pretext of studies and other academic activities," spokesman Wang Wenbin said.