The Australian Federal Police have arrested at least six people, including a 63-year-old New Zealander, and found 1.4 tonnes of cocaine.
Police said the drugs had a street value of more than $300 million.
The ABC reported that more arrests were likely.
New Zealand Customs Deputy Controller of Operations Bill Perry said the Australian Defence Force intercepted the boat about 300km off the coast of Sydney last week.
"The boat was moored at Tauranga before it left the country in January and headed up into the Pacific.
"It met a mothership in the Pacific and then left for Australia, we have on-going enquiries into the whereabouts of that other boat."
Mr Perry said two men were on the boat and a further four were arrested in Sydney.
"One is a New Zealand man who is 63, he has been charged and appeared in court - he will reappear in court in Australia on Wednesday.
"Four were Australians and one was a Swiss-Fijian with dual citizenship."
Mr Perry said the seizure and arrests were the result of a two-and-a-half year joint investigation by Australian and New Zealand authorities.
"This is a huge piece of work by an intelligence analyst, about six months into this investigation the link with Australia became clear and that's when we contacted the authorities there.
"About 150 people have been involved - this has been a significant collaboration which has led to a great outcome for Australasia."
Mr Perry said it was unclear where the drugs came from but cocaine usually originates from South America.
"The drugs were destined for Australia but obviously we are concerned some of them could have ended up here.
"It's well documented that crime is trans-national - we are concerned that the Pacific is an area that is being targeted by these criminals."
New Zealand Customs has just placed an officer in Hong Kong and one will soon be placed in Washington to investigate the Pacific and its role in the movement of drugs.
New Zealand Customs has a team of seven in Australia assisting the federal police with further investigations - the 1.4 tonnes of cocaine will be examined and then destroyed