Italy has received approval to use the European Union's export control system for the first time, amid rising tensions about vaccine shortages.
Finance Minister Simon Birmingham says it's a reminder other countries are desperate, while Australia is in a good position.
"We are obviously disappointed and frustrated by this decision, but it is also why we took a belt and braces approach," he told Sky News on Friday.
"We've contracted up to 150 million doses of vaccines, including 50 million doses to be produced in Australia.
"The world is in quite uncharted territory at present, it's unsurprising that some countries will tear up the rule book."
Home Affairs Minister Peter Dutton said the first AstraZeneca doses to be produced locally would be ready within weeks.
"This 250,000-dose issue is not going to affect the rollout," he told the Nine Network.
Deputy Labor leader Richard Marles welcomed the government's confidence the program would not be affected.
Mr Dutton stressed there was no problem, as he urged people to speak to their doctors to see when they could be vaccinated.
The Australian Medical Association's Chris Moy said the government's decision to lock in local manufacturing would protect against "vaccine nationalism".
"It may have a slight delay because the first three or four million were destined to come from overseas," he told Nine.
Italy argues Australia is not a high-risk country, with low case and death numbers, in stark contrast to countries overwhelmed by the pandemic.
The EU has been frustrated with a slow vaccine rollout and criticised AstraZeneca for a shortfall in delivering millions of doses.
The export ban coincides with the first AstraZeneca jabs being administered in Australia on Friday after a shipment arrived on Sunday.
Frontline health workers at the Murray Bridge Hospital, east of Adelaide, have been the first to get the new jab, which is initially being rolled out to South Australia and Western Australia.
Vaccines will be a key topic for Prime Minister Scott Morrison and his state and territory counterparts at Friday's national cabinet meeting. The leaders will discuss international arrival caps, which have been flagged for change on April 30.
Victoria has not been accepting flights from overseas since the virus again leaked from hotel quarantine, prompting a short lockdown across the state.
Senator Birmingham says other states are carrying the load.
It would be a much fairer arrangement if Victoria did its bit.
The leaders will also be briefed on the best way to respond to new coronavirus strains which have emerged around the world.
Meanwhile, a Queensland nurse with a history of severe allergic reaction has recovered from an adverse response to the COVID-19 vaccine.
People with a history of anaphylaxis have been warned not to get the vaccine.