Performing the Nazi salute in public or displaying symbols such as the swastika are now illegal.
Under new laws, which came into force on Monday, any display of the Nazi swastika or the SS symbol is banned, while the selling of items with Nazi symbols is prohibited.
The legislation also includes a federal ban on performing the Hitler salute in public, following similar prohibitions on the gesture at a state level in Victoria and Tasmania.
Attorney-General Mark Dreyfus said the legislation had sent a strong statement to the community.
"This is the first legislation of its kind and will ensure no one in Australia will be allowed to glorify or profit from acts and symbols that celebrate the Nazis and their evil ideology," he said.
"The passage of the (legislation) through the federal parliament last month sent a clear message: there is no place in Australia for acts and symbols that glorify the horrors of the Holocaust and terrorist acts."
Executive Council of Australian Jewry executive Alex Ryvchin said the necessity for the new laws was "lamentable" and must prompt a wider reflection on Australian society.
"The fact that we need laws banning the public display of the swastika in this country shows a great failure in our society," he said.
"A failure of education and a failure more broadly than that. The fact that people feel compelled to display the symbols of genocide of mass slaughter of anti-Semitism.
"This requires a much deeper examination of why people are drawn to this form of extremism, the sorts of conspiracy theories and myths that abound in society."
The passage of the legislation followed a rise in anti-Semitism and the use of the Nazi symbol by far-right groups.
Private collectors of Nazi materials or war souvenirs have not been caught up in the new provisions, but they are now banned from selling their items.
Swastikas used as symbolism in other religions such as Hinduism and Buddhism remain unaffected.
