"We really need Crowded House, our Hall of Fame is more of a doorway," Clement's comedy partner Bret McKenzie said.
Missy Higgins and Bernard Fanning performed two of the band's biggest hits, Fall At Your Feet and Better Be Home Soon.
Crowded House themselves then played out their big moment with a performance of their hit Distant Sun .
Accepting the award Neil Finn thanked family, the "unsung heroes" behind the scenes and all the musicians who had played with them.
It is the 30th anniversary of the Aria music awards.
The other big winners included EDM artist Flume, hip-hop group Hilltop Hoods and kids favorite The Wiggles.
Main ARIA Award winners
Album Of The Year: Flume - Skin
Best Male Artist: Flume - Skin
Best Female Artist: Sia - This Is Acting
Best Dance Release: Flume - Skin
Best Group: Violent Soho - WACO
Breakthrough Artist: Montaigne - Glorious Heights
Best Pop Release: Flume - Never Be Like You
Best Independent Release: Flume - Skin
Song of the Year: Troye Sivan - Youth
- NZ Herald with AAP