Twenty five tonnes of nuclear waste will be transported to Lucas Heights after it arrived in Wollongong on Saturday.
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The bulk carrier BBC Shanghai was greeted at Port Kembla Harbour by a heavy police presence including the riot squad, mounted officers and divers.
Police boats and jet skis accompanied it into the inner harbour as Greenpeace protesters followed behind.
On shore about a dozen protesters unfurled a banner that read "don't waste Australia".
"We are very concerned our place, our region, is being used to do other people's dirty work," South Coast Labour Council secretary Arthur Rorris said.
Arriving from France, the ship entered the harbour just before 1pm. The waste was expected to take around eight hours to unload before it was to be transported in in a six-metre-long and three-metre-wide steel cell along the Princes Highway under police guard to Lucas Heights.
Police in Port Kembla worked with the Australian Nuclear Science and Technology Organisation (ANTSO) to coordinate the arrival. ANTSO in a statement said the waste would be held in Sydney while the federal government searches for a permanent site to dump nuclear waste.
A shortlist of six sites was released in November, including Sallys Flat near Bathurst in New South Wales and three sites in South Australia.
The waste is what remains of shipments sent to France for reprocessing in the 1990s when eight shipments in total were sent there, as well as to the United Kingdom and the United States.
The waste sent to the US will remain there, but shipments sent to the UK will return within five years.
In its statement ANTSO said the nuclear waste had "enabled generations of potentially life-saving nuclear medicine production".
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