Four Hong Kong nationals and three Australian residents were also arrested in raids in Sydney on Monday.
Over half a ton of drugs, including 306 kg (674.61 lb) of crystal methamphetamine – also known as ”ice” – and 252 kg of heroin, were seized.
The haul is the largest seizure of ”ice” and the third largest seizure of heroin, police said.
The drugs are estimated to be worth A$500 million (US$526 million), the Australian Federal Police (AFP) said in a statement.
The raids and arrests followed a year-long investigation.
“Countless lives would have been affected had this seizure made its way to Australian streets,” Deputy Commissioner Andrew Colvin told Australian media.
He said investigations would continue and more arrests could take place.
The investigations into the syndicate began in August 2011 after a tip-off from the US Drug Enforcement Administration, police said. The drugs were found in a shipment of terracotta pots on 19 July.
The suspects will face charges for importing and possessing drugs in a Sydney court.
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