HMAS Melbourne and Pakistan's PNS Alamgir joined forces to intercept and board a dhow east of Oman's Masriah Island, where they found 1,951 kilograms of cannabis resin hidden in a secret compartment in its fishing hold.
Estimating the haul to have a street value of USD 102 million, Melbourne commander Brian Schlegel said its seizure would help staunch funds going to extremist groups that rely on illegal drug shipments for income.
"Removing the funding that flows from the sale of these drugs has a direct impact on a terrorist organisation's ability to buy weapons in the future."
The Melbourne is in the Indian Ocean on global anti-piracy operations and has intercepted nine suspected pirate vessels since leaving Australia in August 2013.
During its mission, it has seized 543 kilograms of heroin estimated to be worth in excess of USD 1 billion, including a 353 kilogram bust off the coast of Tanzania earlier this month.