It was quite deep, and there were no immediate reports of deaths or injuries and no tsunami warning was issued.
But earthquake experts say it's surprising how far away from the epicentre the earthquake was felt, including in northern Australia.
Correspondent: Will Ockenden
WILL OCKENDEN: The 7.3 magnitude earthquake woke residents across northern Australia. Nat from Darwin was the first to call ABC Local Radio.
NAT: I was just about to nod off and then I thought the dog or something was on my bed, you know, shaking. And I realised it was an earthquake. Everything in the room was sort of shaking. Nothing fell off the shelf but yeah, it was quite intense, it lasted for about maybe three minutes.
WILL OCKENDEN: She says she hasn't felt a quake that big before.
NAT: It was the kind of same pressure that my kids would apply if they were trying to wake me up.
WILL OCKENDEN: Four hundred and thirty kilometres away in Western Australia, Linda felt it too.
LINDA: I am in Kununurra. I actually felt the earthquake here. I was lying on my bed. My bed actually moved from side to side for about maybe 30 seconds.
WILL OCKENDEN: When earthquakes strike, the phones at Geoscience Australia light up.
MARK LEONARD: Everyone wants to know where and how big the earthquake is before you can actually solve it.
WILL OCKENDEN: Dr Mark Leonard is a senior seismologist with the organisation.
MARK LEONARD: Geoscience Australia received dozens and dozens of felt reports from the residents of Darwin, a few from other sort of small communities on that northern, north coast of Australia.
WILL OCKENDEN: The epicentre was about 600 km north-west of Darwin in the Banda Sea. Dr Leonard says there hasn't been any reports of damage in Australia's north or Indonesia.
MARK LEONARD: It's a large earthquake, a magnitude 7.3 is a very large earthquake. If it had been a very shallow earthquake it could have produced a sort of local tsunami but this particular event was quite deep, it was sort of 150, 160 kilometres deep.
So it didn't produce any tsunami. At that depth it sort of wouldn't have done any damage even for people sort of living on the islands directly above the epicentre.
WILL OCKENDEN: It was caused by the Australian plate colliding and slipping under the Asian plate. Dr Leonard says it's of the most active earthquakes zones in the world.
MARK LEONARD: That's the intriguing thing about this earthquake, is why it was so widely felt.
As I was saying, an earthquake of this size isn't particularly unusual in that area. Must have been something about its particular mechanism and the exact orientation of that mechanism that sent sort of
Earthquakes can be quite directional in the waves and this one just seems to have sort of had a focus of waves come sort of pretty much straight at Darwin.
WILL OCKENDEN: Kevin McCue, an adjunct Professor of earthquake engineering at Central Queensland University, says it's a warning that a massive, damaging earthquake could strike at any time. He says it's easy to be complacent but building standards should be reviewed in northern Australia.
KEVIN MCCUE: Big one's yet to come. We haven't had a great earthquake, as I would call it. We've had plenty of warning calls.
Well, I think it will happen. It's just a matter of when will it happen and the probability of it happening. We know it's probably a once in maybe 300 or 400 year earthquake but we have no indication. There's no indicator from the earthquake to say when it's about to happen.
So we don't know but we just have to plan for it.