The assembly of visiting warships ahead of the International Fleet Review got under way yesterday at Jervis Bay.
The vessels will sail up to Sydney for entry into the harbour exactly as did the original seven ships of the first Australian navy 100 years ago on Friday.
Eleven warships are already lying at anchor off the naval training base at HMAS Cresswell.
Ships from Singapore, Malaysia, Indonesia, Thailand, Brunei, China and India were among those participating in training exercises, along with HMAS Parramatta.
The exercise is the flagship activity under Australia's and Malaysia's co-chairmanship of the inaugural meeting of ASEAN defence ministers' maritime security working group.
The exercises being practised yesterday were boarding techniques - particularly relevant to Prime Minister Tony Abbott's pledge to turn back boats.
Teams from the USS Chosin, Malaysia's KD Jebat and Thailand's HTMS Krabi joined forces on RIBs to board the Japanese warship JDS Makanami, watched by Indonesian observers.
An Australian team then dropped from a Seahawk (naval version of Black Hawk) helicopter to board the New Zealand ship HMNZ Te Mana.
Commodore Peter Leavy, co-exercise director, said the exercises would also include maritime security and aviation procedures.
"Maritime security is something that we really must protect and no nation can do that alone," he said.
"Our ability to work with our regional neighbours and friends is so critical."
He said it was a "significant undertaking" for many nations that had come a long way to participate, such as the US, Nigeria and the UK.
"The training we get at sea, both this week and after the fleet review, means that this is not just a commemorative undertaking in Sydney," he said.
"There is some really valuable training with navies that we don't get to work with all that often."
When foreign sailors went ashore at HMAS Cresswell, they were keen to photograph the many kangaroos around the base, he said.
On Wednesday, another group of visiting warships off the coast will join those already in Jervis Bay for final preparations. About 25 warships will head north for Sydney on Thursday morning.
Lieutenant Carl Cooper, navigator on HMAS Parramatta, said he was proud to be taking the namesake of one of the original seven warships into the harbour on Friday.
Asked about congestion on the harbour, he said: "Generally there's a rule might has right [of way], but we do have to do our bit to maintain safety at sea."
Reservist Lieutenant Mark Shannon is temporarily attached to the Malaysian ship KD Jebat.
He said: "The crew was interested to learn about wombats. They want to climb the Harbour Bridge and go to Sydney Opera House."