A Virgin pilot was the first to receive warnings from the Chinese military mid-flight of a live fire exercise in the Tasman Sea, before alerting aviation officials.
Airservices Australia representatives told a parliamentary hearing on Monday evening, 49 flights had to be diverted last Friday after the People's Liberation Army-Navy broadcast it was undertaking hazardous activity in the busy airspace.
Nationals senator Bridget McKenzie grilled officials on the chronology of events.
Airservices Australia chief executive Rob Sharp confirmed his organisation became aware of the risk to aircraft at 9:58am on Friday.
"It was in fact Virgin Australia advising that a foreign warship was broadcasting that they were conducting live firing 300 nautical miles east of our coast," he said.
"That is how we first found out about the issue."
Mr Sharp said within two minutes, by 10am, air traffic control commenced a hazard alert to let all flights in the area know there was danger.
Deputy chief executive Peter Curran told the hearing, the Virgin pilot had received the transmission on an emergency frequency monitored by pilots - but not air traffic control.
"We cannot hear what was said, and the pilot of the Virgin aircraft heard what was said from the Chinese vessel, relayed it to air traffic control, and air traffic control passed that through our system and started giving hazard alert into all the aircraft on the frequency," he said.
Mr Curran said just after 10am the organisation's national operations centre contacted Defence Joint Operations Command to advise of the situation.
He said Airservices Australia wasn't sure if it was a potential hoax or real, but that the information was passed on.
Mr Curran said the usual notice period for a military to provide an alert about activity was 24 to 48 hours.
In response to the reports, Prime Minister Anthony Albanese reaffirmed the Australian military was aware soon after the alert was received.
"I've spoken with the chief of the defence force about what has occurred," he told reporters.
"Australia has had frigates both monitoring by sea and by air."
The live fire exercise follows a run in with the Chinese military earlier this month, where a fighter jet fired flares in front of a RAAF surveillance aircraft over the South China Sea.
