Acting Chief Medical Officer Sonya Bennett on Friday declared the mosquito-borne virus a Communicable Disease Incident of National Significance, as dozens of suspected cases across the country are investigated.
It follows a National Security Committee of Cabinet briefing on the disease earlier this week.
The announcement triggers the implementation of a national health policy, intervention, public messaging and deployment of extra resources to affected states and territories.
Dr Bennett said a national working group of disease, vaccine and arbovirus experts has been set up, with mosquito surveillance, control measures and a vaccine rollout on the way.
"The Australian government's health and agriculture departments are working very closely with their state government counterparts to ensure a swift and coordinated response," she said.
NSW Health confirmed on Friday night a person from the NSW-Victoria border region was in intensive care in a stable condition with the virus, marking the state's first case after outbreaks in Queensland and Victoria.
Several more patients in NSW were undergoing testing and more cases were expected to be confirmed in the state over coming weeks.
On Thursday night, Queensland Health confirmed a person infected with JEV was being treated in a Brisbane hospital after travelling to the state's south.
Victorian authorities have confirmed eight suspected cases of JEV in the state, connected to a piggery near Echuca in the state's north.
Two children aged under 10 and six adults are among the infected people, six of whom have been taken to hospital. One is also a NSW resident.
Overall, there are 16 human encephalitis cases "of unknown cause" under investigation across NSW, Victoria and South Australia, a federal Department of Health spokeswoman told AAP.
Japanese encephalitis virus spreads through mosquito bites and people in regional areas who are in contact with pigs may be at particular risk.
Australia's Chief Veterinary Officer Mark Schipp said there are now 14 confirmed outbreaks at piggeries across NSW, South Australia, Queensland and Victoria.
Two vaccinations are available for protection against JEV in Australia, with older people and those aged under five at a higher risk of developing a serious illness.
The disease is not transmitted from person to person and cannot be caught by eating pork or pig products.
Anyone who works with pigs or horses, even if they're backyard pets, is urged to keep an eye out and report any possible signs of the disease.
"The key signs to look out for in pigs are stillborn or weak piglets, some with an impaired nervous system," Dr Schipp said.
"Piglets can develop encephalitis or wasting, depression or hindlimb paralysis. Adult sows do not typically show signs of disease."
People living in high mosquito areas are also encouraged to use repellent, containing picaridin or DEET, and cover up with loose-fitting clothing.
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