A new cybercrime report is received every six minutes with small businesses and everyday Australians bearing the brunt of the "very concerning" malicious attempts.
More than 87,000 cybercrime incidents were reported to the Australian Signals Directorate in 2023/24.
While that was down seven per cent from the prior year, the amount of money victims lost to cybercrime continued to climb.
Individuals impacted by online crime lost an average of $30,700 - an increase of seven per cent - while small businesses targeted by cyber attacks lost about $50,000.
Acting Prime Minister Richard Marles said the growing cyber threat is "very concerning" and it is up to the government and people to act.
"This is a real and present threat," he told reporters on Wednesday.
The directorate is responsible for foreign signals intelligence and cyber security. It collects and analyses data from communications systems, radio frequencies and electronic transmissions.
The agency answered more than 36,000 calls to the Australian Cyber Security Hotline over the year, an annual increase of 12 per cent.
Mr Marles said the federal government has increased funding for the directorate and will double the agency's size within five years due to the growing number of cybercrime incidents.
Director-General Abigail Bradshaw said the threat report coincided with a changing environment online and conflicts overseas.
"This year's threat requires a shift in the nation's cyber security posture towards stronger defences," she said.
"It is a digital landscape in which, unfortunately, none of us can switch off lest we be forcibly disconnected by malicious actors."
State-sponsored cyber operations represented a significant risk to Australia, the intelligence agency warned.
Increased competition throughout the Indo-Pacific would only escalate this risk.
China, Russia, North Korea and Iran are understood to be behind the bulk of state-sponsored operations against Australia.
"State-sponsored cyber operations increase as geo-strategic tensions change, while cybercriminals and hacktivists also continue to remain an ongoing and persistent threat," Ms Bradshaw said.
"Over the past year, ASD and our international partners have seen malicious cyber actors revising their tactics to avoid detection and blend in with regular network traffic, techniques known as living off the land."
China and Russia were using the technique prominently.
"(China's) choice of targets and pattern of behaviour is consistent with pre-positioning for disruptive effects, rather than traditional cyber espionage operations," the report said.
Of the 1100 cyber security incidents the agency responded to over the year, more than one in 10 were related to critical infrastructure.
This includes communications networks, financial services and markets, as well as data storage and processing facilities.
More than one in four self-reported cyber crimes involved identity fraud, while 15 per cent were tied to online shopping and 12 per cent to banking.
Businesses affected by cyber incidents were most likely to be impacted by compromised emails, followed by online banking frauds.
Mr Marles said while the government invests in the nation's cyber defences, the report shows the importance of Australians and businesses being aware of the risks.
"(It's) not just hackers in a basement, it's organised cybercriminals around the world (and) we are seeing state actor involvement as well," he said.
"We're seeing a lot of grey in between where there's co-operation between both and that's what makes the threat environment so complex and one which companies and businesses really need to be very vigilant about."
