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.