Customs officials have seized almost 13 million cigarettes in coordinated swoops on properties in three states.
Following the swoops, police arrested and charged two Sydney men with smuggling offences.
Customs officers raided properties in Sydney, Melbourne and Perth after a month-long investigation stemming from the arrival of two sea containers in Fremantle.
"The water tanks in the two containers, addressed to a business in Sydney, were allegedly found to contain concealed cartons of cigarettes," an Australian Customs spokesman said in a statement tonight.
"Another six containers were subsequently targeted and searched by Customs and were also found to contain concealed cigarettes and tobacco."
The containers were all sent from China and were monitored as they were delivered to addresses in Melbourne and Sydney.
In all, Customs say they uncovered 12.94 million cigarettes and a 294kg pouch of tobacco.
The properties were raided on Tuesday and police have so far charged two men and say more charges will follow.
The two men arrested in Sydney were brothers, from Canley Heights, aged 33 and 37.
They were charged under the Customs Act over the possession and conveyance of smuggled goods.
The pair were granted conditional bail to appear in Sydney's Downing Centre Local Court on November 4.
The maximum penalty for the offence is 10 years in jail.
