Key Points:

Investigators have smashed an international drug syndicate and seized Ecstasy worth A$440 million ($560 million).

The Ecstasy seizure - the world's largest - also led to the cracking of a A$9 million money laundering operation.

Australian federal police arrested 16 people in early-morning raids in Victoria, New South Wales, South Australia and Tasmania yesterday after tracking 4.4 tonnes of Ecstasy hidden in shipping containers.

The joint operation between federal police and customs also seized 150kg of cocaine.

Packed in tomato tins, the Ecstasy was allegedly shipped to Melbourne from Italy by a syndicate reported to include men of Italian, Lebanese, Indian and Australian heritage.

The Melbourne Age newspaper said that among premises raided were properties owned by figures linked to the Calabrian mafia in the rural NSW town of Griffith, made infamous as a drug centre by the 1979 Woodward Royal Commission into drug trafficking.

The commission was established after the disappearance and apparent murder of anti-drugs campaigner Donald Mackay.

The Age, which had reporters at the Griffith operation, said it included a raid on the home of Pasquale Barbaro, 46, whose father Francesco "Little Trees" Barbaro was identified as a member of the Calabrian syndicate.

Pasquale Barbaro was found guilty in connection with a huge cannabis plantation discovered in NSW in 1989, but his conviction was quashed.

The Age said other raids were made on included the homes of Black Uhlans motorcycle gang founder and suspected amphetamine baron John Higgs, and Rob Karam, an associate of convicted cocaine trafficker Tony Mokbel, recently extradited from Greece to face charges in connection with Melbournes gang wars.

The operation began in June last year after customs officers, acting on intelligence from the federal police, X-rayed a recently-arrived container in Melbourne and found tomato tins packed with Ecstasy tablets.

About 3000 tins, each weighing 1.5kg, were emptied, and the tablets replaced with an "inert substance".

Three bags of cocaine were found in another container.

Federal Police Commissioner Mick Keelty said the ecstasy seizure was a major victory in the fight against drug syndicates.

"This is an extraordinary outcome for law enforcement, as it continues to work together to detect illicit drugs before they reach Australia," he said.

"International intelligence, combined with the cooperation of local law enforcement agencies, played a big role in the success of the operation."

Customs chief executive Michael Carmody said investigators had thwarted a sophisticated and well-organised syndicate.