The secret stash was detected by X-ray imaging during routine inspection of the consignment, which arrived at Port Botany in Sydney from Mexico via Malaysia.
It took engineers almost three days to dismantle the heavy-duty generator and reveal an estimated 373.8kg of drugs, including 250kg of methamphetamine and more than 120kg of cocaine.
The Australian Federal Police is searching for the criminal network behind the shipment, calling for assistance from anyone who has been approached about storing or repairing a generator or selling spare parts.
AFP Acting Superintendent Stuart Kimbell said criminal networks who bring harmful drugs into the country have no regard for the devastation they wreak.
"This mixed bag of illicit drugs was likely destined for several different criminal groups, to be sold into a range of communities," he said on Wednesday.
"Despite the elaborate attempt to conceal such a large quantity of drugs, the co-ordinated efforts of law enforcement ensured these substances never reached Australian streets."
The complex concealment and careful extraction of the drugs is a testament to the technical capability of Australian Border Force officers, Superintendent Jared Leighton said.
"We know criminal syndicates invest significant time and resources into attempts to evade detection, and this seizure shows those efforts are no match against co-ordinated enforcement capabilities," he said.
It comes as the alleged co-ordinator of a network of trusted insiders in Australia's cargo ports was charged over multiple plots to import up to one tonne of illegal drugs over eight months.
The 29-year-old Sydney man allegedly paid insiders at Port Botany up to $200,000 in cash for accessing illegal drugs in shipping containers in 2025.
The shipments include 140kg of cocaine hidden in a shipment of fresh flowers from Columbia and 506kg of cocaine from Europe found behind a false wall, according to the AFP.
The 29-year-old is also accused of co-ordinating a failed 506kg cocaine importation in August by targeting a legitimate high-volume shipment and concealing the drugs inside.
Investigators raided homes in Sydney and seized a cryptocurrency ledger, expensive jewellery, and electronic devices before arresting the alleged co-ordinator.
He was charged with 10 offences, including four counts of attempting to possess a commercial quantity of cocaine.
The 29-year-old was refused bail and will face court on Friday.
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