Victorian health officials issued a warning about the disease on Sunday, after evidence was found in pigs in Echuca, near the NSW border.
Four Victorians have since contracted the virus, believed to be the first cases reported in Australia's south.
All four were admitted to hospital and one has since been discharged.
Japanese encephalitis virus spreads through mosquito bites and people in regional areas who are in contact with pigs may be at particular risk.
The disease is not transmitted from person to person and cannot be caught by eating pork or pig products.
Australia's health department confirmed the disease had been found in one piggery in Victoria's north, six piggeries in NSW and one in Queensland.
"This is the first time the virus has been detected in southern Australia, and biosecurity authorities are working with their human health departments to understand the implications and risks of human exposure," Australian Chief Veterinary Officer Dr Mark Schipp said.
Federal, state and territory authorities are meeting regularly to "work through the next steps of this situation".
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.
Australia's Acting Chief Medical Officer Sonya Bennett said two vaccinations were available for protection against JEV in Australia.
Older people and those aged under five who are infected have a higher risk of developing a serious illness.
"Encephalitis is the most serious clinical consequence of JEV infection. Illness usually begins with symptoms such as sudden onset of fever, headache and vomiting," she said.
Dr Bennett said anyone experiencing these symptoms should seek urgent medical attention.
She encouraged people to avoid exposure to infected mosquitoes, with those in high mosquito areas encouraged to use repellent and cover up with loose-fitting clothing.