Australia's military remains monitoring the ships after were spotted moving down the coast about 280km east of Sydney, in international waters, on Thursday.
Foreign Minister Penny Wong met with her Chinese counterpart and demanded answers as to why they only offered short and limited notice before the firing was carried out.
China's actions are believed to have complied with international law and Australia's defence force has advised of no imminent threat to its or New Zealand's assets, with the activity most likely finished.
But Defence Minister Richard Marles declared the answers given by China were "unsatisfactory".
"An issue here was that the live firing that was notified by China ... they notified a live firing exercise, but with very short notice, which meant that was very disconcerting for planes that were in the air," he told Channel Seven.
"There was never any prospect of people being in danger, but this is obviously a very disconcerting set of circumstances, and while it is compliant with international law, the notice was short, at least relative to what we would do in this circumstance."
Australia has coordinated its response with New Zealand but has not spoken with key ally America after the incident, Mr Marles said.
Qantas, Emirates and Air New Zealand modified flight paths between Australia and New Zealand after receiving reports of live firing in international waters.
A Defence spokesperson said China advised by a verbal radio broadcast on a civilian it would carry out its drill.
"(China) did not inform Defence of its intent to conduct a live fire activity, and has not provided any further information," a statement read.
"That formation has now reverted to normal indicating that the live fire activity has most likely ceased … no weapon firings were heard or seen; however, a floating surface firing target was deployed by (China) and subsequently recovered."
Australian officials said it was customary to give 24 to 48 hours notice of live fire activity.
Senator Wong met with Chinese Foreign Minister Wang Yi on the sidelines of a G20 meeting in Johannesburg on Friday.
Along with the increasing military tensions, she raised the case of Australian citizen Yang Jun, who has received a suspended death sentence in Beijing, along with Australia's wider opposition to the death penalty.
Senator Wong said her discussions with China were "calm and consistent".
New Zealand Defence Minister Judith Collins said the drills were the "most significant and sophisticated" seen in the region.
They had been tracking the Chinese warships for a number of days, she said.
Analysts believe the sailing is an attempt by Beijing to project power and send a message to Canberra about China's capability.
The sailing follows a run-in with the Chinese military last week, when a fighter jet fired flares in front of an RAAF surveillance aircraft during a patrol over the South China Sea .
The Albanese government lodged a complaint with Beijing over the near-miss, fearing for the lives of the Australian personnel.
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