Lancaster said police would make more arrests in the operation.
"To those who have not been picked up in the first scoop today, it does not mean you should sleep well tonight," Lancaster told reporters. "I guarantee there will be further arrests made ... this is not the end."
Within hours of the arrests, the first of the accused appeared in court.
Afghan asylum seeker Barkat Ali Wahide, 31, was charged in the Perth Magistrates Court in Western Australia with people smuggling between January and May last year. He did not enter a plea and was returned to an immigration detention center.
A 21-year-old Iranian national, a 36-year-old Pakistani national and another two Afghan nationals, aged 40 and 33, were also due to appear in courts across Australia. They each face a prison sentence of up to 10 years if convicted of people smuggling.
Lancaster said the operation would put a major hole in people smuggling networks that bring dozens of boats to Australia every month.
He said three of the five suspects were arrested in immigration detention centers, where asylum seekers are held until refugee claims are assessed and where unsuccessful claimants await deportation.