Three Chinese warships that were involved in have re-entered Australia's Exclusive Economic Zone and are currently in the vicinity of Tasmania.
The Defence Department has confirmed it is working with New Zealand's military to jointly track the three warships which are operating about 300km east of Hobart.
The news comes as officials in Canberra faced questions over why it was a Virgin pilot that had been the first to alert authorities about Beijing's live-fire exercises on Friday, which had forced airlines to divert flights.
The exclusive economic zone is a maritime area that extends from 22 to 370km from the Australian coastline, over which Australia has jurisdiction and sovereign rights.
The Australian and New Zealand defence forces said they were continuing to track the People's Liberation Army-Navy flotilla "in the vicinity of Australia's maritime approaches" after the ships re-entered Australia's exclusive economic zone in the early hours of Tuesday.
“Australia expects all militaries operating in the region to engage transparently, maintain the highest standards of safety and professionalism, and we encourage all states to maintain open communication to ensure their actions support regional security and stability," Defence said in a statement.
“We respect the right of all states under international law to exercise freedom of navigation and overflight in international waters and airspace, just as we expect others to respect our right to do the same."
The flotilla continued its way along Australia's east coast as Airservices Australia representatives told a parliamentary hearing that 49 flights had to be diverted last Friday after the Chinese navy said that it was undertaking hazardous activity in the busy airspace.
Nationals senator Bridget McKenzie on Monday evening grilled officials on the chronology of events.
Airservices Australia chief executive Rob Sharp confirmed his organisation became aware of the risk to aircraft at 9.58am on Friday.
"It was in fact Virgin Australia advising that a foreign warship was broadcasting that they were conducting live firing 300 nautical miles (556km) east of our coast," he said.
"That is how we first found out about the issue."
Mr Sharp said that within the space of two minutes, by 10am, air traffic control commenced a hazard alert to let all flights in the area know there was danger.
Deputy chief executive Peter Curran said just after 10am the organisation's national operations centre contacted Defence Joint Operations Command to advise of the situation.
He said Airservices Australia was not sure if it was a potential hoax or real, but that the information was passed on.
In response to the reports, Prime Minister Anthony Albanese reaffirmed the Australian military was aware of the incident shortly after the alert was received.
"I've spoken with the chief of the defence force about what has occurred," he told reporters."
The live-fire exercise follows a run-in with the Chinese military earlier in February, where a fighter jet fired flares in front of a RAAF surveillance aircraft over the South China Sea.
