Government bodies have been using thousands of drones and devices made by a Chinese company with links to the country's military despite them being banned in the United States.
Opposition cyber security spokesman James Paterson conducted an audit that found 3114 drones and other technology manufactured by DJI were in use by at least 38 agencies and departments in Australia.
These include the Department of Prime Minister and Cabinet, Defence and the Bureau of Meteorology .
Defence Minister Richard Marles grounded drones, some of which are used for border protection and by the Australian military, earlier this year due to security concerns.
Senator Paterson said a government-wide grounding of all DJI drone fleets should be urgently enforced.
"The government needs to move beyond its whack-a-mole approach, where it is reliant on an opposition senator to sound the alarm on cyber security risks, towards a more systemic, robust and proactive model," he said.
"The Albanese government should act now before it’s too late to mitigate the risk of products being weaponised to conduct cyber disruptions, surveillance and large-scale foreign interference."
DJI was black-listed by the US in October on national security grounds and due to concerns the technology had been used in surveillance against the persecuted Muslim Uighur minority in China's Xinjiang province.
A spokesman for Cyber Security Minister Clare O'Neil said the government was considering how it managed the risks associated with manufacturers that could be "compelled by foreign governments to act against Australia’s interests".
“The Australian government is committed to keeping Australians safe and will not shy away from making tough decisions to amend our security settings if and when appropriate," her spokesman said.
"We are continuing to assess Australia’s technology security policy settings to ensure they remain fit for purpose."
Australian Association for Uncrewed Systems president Dr Reece Clothier said although locally manufactured drones carried significantly less risk, the threat of a security breach would not be eliminated.
"It's important not to have a knee-jerk reaction, but it is beneficial to have an objective risk assessment conducted and to have an informed conversation," he told AAP.