"There were people down in Bermagui that live on their boats in the harbour and we had to make sure they got out of there."

SES officers were sent to Kiama Harbour and observed water levels receding by about 40cm before surging in again, while at Port Kembla the water receded by about 20cm.

Coastguards, police and fire services were all put on red alert as the danger to low-lying and coastal areas was assessed.

However, warnings were later scaled back to the lesser "marine" version, with people being urged to stay out of the water and away from low-lying areas until this morning.

Australian Tsunami Research Centre co-director Dale Dominey-Howes said it was only the second time the Australia Tsunami Warning System, developed after the 2004 Boxing Day tsunami, had been activated for the east coast.

Civil defense officials in New Zealand said phone services were disrupted in some parts of the city of Invercargill after the earthquake, water pipes had broken and power lines had been brought down but damage appeared to be minor.

One South Island resident, Simon Darby, told New Zealand's Herald newspaper the quake lasted about two-and-a-half minutes.

"I lived in Tokyo for three years so I know what large quakes are like. Even though we are maybe 400km from the epicentre this was easily the longest and biggest I have ever felt," he said.