Australian fishermen also have reported poachers carrying machetes, knives and even being armed with guns.
Previously, the navy was restricted to firing warning shots.
There are three stages of engagement under the new guidelines.
Firstly, if commands to stop the boat are ignored, the navy is authorised to use tear gas and pepper spray.
If this fails, "distracted" ammunition or long-range acoustic explosions can be used.
The final stage involves the navy firing into the bow or engine of a fleeing boat to disable it
An extra $19.7 million was announced in this year's Budget to combat Australia's growing illegal fishing problem.
Illegal fishermen have been plundering Australian waters of everything from reef fish and sharks to dolphins and turtles.
More than 120,000kg of fish have been seized from illegal boats in the past three years.
In 2005, there were 13,018 sightings of foreign fishing vessels, up 35 per cent on 2004.
The Sea Shepherd Conservation Society welcomes this news.
""We need to see nations getting tough with poachers," said Sea Shepherd captain Alex Cornelissen. "Illegal fishing is escalating and tougher measures are needed."
Sea Shepherd only has one question to the Australian Minister of Defense and that is to ask why Australia is getting tougher (and rightfully) so on some foreign fishing operations in Australian territorial waters but is ignoring the on-going poaching of whales by illegal Japanese whaling operations in Australian Antarctic Territorial waters?
"This blatant discrimination favouring Japanese poachers is hypocritical," said Captain Paul Watson from the Sea Shepherd ship Farley Mowat in Melbourne harbour. "The Australian Navy needs to start seriously kicking Japanese poachers in the the ass for illegally slaughtering whales. I think these new rules of engagement are great but they need to be applied acoss the board to all poachers in Australian waters and not just against poachers from poor nations."
"The message that Australia has been sending is that if you are a poor nation poaching in Australian waters, you're in trouble but if you are a rich nation doing the same thing, it's okay because we would like to sell you uranium and buy your beer."
l
Founder and President of the Sea Shepherd Conservation Society (1977-
Co-Founder - The Greenpeace Foundation (1972)
Co-Founder - Greenpeace International (1979)
Director of the Sierra Club USA (2003-2006)
Director - The Farley Mowat Institute
Director - www.harpseals.org
"Sail forth - steer for the deep waters only,
Reckless O soul, exploring, I with thee and thou with me,
For we are bound where mariner has not yet dared to go,
And we will risk the ship, ourselves and all."
- Walt Whitman
Friday Harbor, Wa 98250 USA
