Prime Minister Scott Morrison says it is "nonsense" to suggest Russia is sending "peacekeepers" into Ukraine, labelling the invasion unwarranted and unprovoked.
As Russian President Vladimir Putin recognised two breakaway regions in eastern Ukraine as independent, the country's army has moved so-called "peacekeeping" forces into the area, heightening tensions in eastern Europe.
Mr Morrison hopes to see diplomatic talks prevail to prevent a conflict in Ukraine, following the movement of "peacekeepers".
"Some suggestions that they are peacekeeping is nonsense. They have moved in on Ukrainian sovereign territory," he told reporters in Tasmania.
"We cannot have threats of violence being used to seek to advantage a nation's position over others."
The prime minister said Australia would be in lockstep with other nations and immediately impose economic sanctions on Russia should there be further military action in Ukraine.
"Russia should step back, it should unconditionally withdraw, back behind its own borders and stop threatening its neighbours," he said.
"It's unacceptable, it's unprovoked, it's unwarranted, and Russia should understand that by seeking to invade another country, that this cannot advantage them, and it would seriously and significantly cost Russia."
The call for Russia to withdraw has been reiterated by Opposition Leader Anthony Albanese.
The Labor leader said Australia stood in solidarity with Ukraine.
"There is no place in 2022 for nation states to just try to carve off sections of another sovereign nation state, which is what we're seeing here," he told reporters.
"This unilateral statement by Vladimir Putin has no place in a world in which we have respect."
Mr Albanese said other countries such as China needed to call out Russia's behaviour on the Ukraine border.
"China and other countries need to speak out in support of the sovereignty of Ukraine," he said.
"We call upon Russia to back off."
The Labor leader said he had received regular briefings on Ukraine.
Former prime minister Tony Abbott has said if Russia was successful, it could create a new Iron Curtain across Europe, particularly if Mr Putin went on to target Poland and the Baltic states.
Mr Morrison said he was aware of his predecessor's comments but was focused on the immediate situation in Ukraine, calling for Russia to withdraw.
Foreign Minister Marise Payne said there was still time for Russia to back away from a potential war.
"This is not inevitable. This does not have to happen," she told Sydney radio 2GB on Tuesday.
"There are still choices to be made by Russia here and we hope we can see productive discussions continue and this be avoided."
Senator Payne met with the Polish foreign minister and secretary of state at the Presidential Palace during a stop in Warsaw.
The foreign minister is in Europe for security talks.
Labor foreign affairs spokeswoman Penny Wong says peace is best kept by speaking up against any unilateral changes to the status quo.
Senator Wong says silence on the aggression creates a potential risk for the Indo-Pacific region as well.
"It does have implications for the world if a member of the international community simply violates international law and engages in unilateral changes to borders," she told the ABC.
"One of the reasons we have had one of the most peaceful, prosperous periods in human history since World War II is, in general, there has been adherence to international law and a recognition that countries don't simply invade each other without justification."
Independent senator Rex Patrick has called for Australia to expel Russia's ambassador should there be further military action.
"Given the trend of events, (Russia's ambassador) would be well advised to start packing their bags now," he said.
