Australia's Department of Foreign Affairs and Trade said it was providing consular assistance to the man, without identifying him.
Australian and Chinese media have identified the man as Karm Gillespie, arrested seven years ago on charges of drug-trafficking in southern China.
China's foreign ministry said on Sunday that capital punishment was suitable for drug crimes that cause serious harm.
"China law stipulates that the law must be equally applied to everyone who commits a crime. China judicial institutions handle the cases of criminals of all nationalities according to the law," said the ministry in a faxed reply to Reuters.
Attempts to reach Gillespie's family were unsuccessful.
"We are deeply saddened to hear of the verdict made in his case," the Australian foreign affairs department said in an emailed statement to Reuters.
"Australia opposes the death penalty, in all circumstances for all people. We support the universal abolition of the death penalty and are committed to pursuing this goal through all the avenues available to us."
Gillespie was arrested in 2013 with more than 7.5kg of methamphetamine in his check-in luggage while attempting to board an international flight from Baiyun Airport in the southern Chinese city of Guangzhou, according to several media reports.
Diplomatic tensions between Beijing and Canberra have worsened since Australia called for an international inquiry into the source and spread of the new coronavirus, which emerged in the central Chinese city of Wuhan.
China has in recent weeks banned Australian beef imports and imposed tariffs on Australian barley. It has also urged Chinese tourists to avoid Australia.
The death sentence for drug smuggling is not uncommon in China, where executions are usually carried out by firing squad.
Last year, the country sentenced two Canadians to death for drug-related crimes following the arrest of Huawei executive Meng Wanzhou and said it was “not worried in the slightest” by mounting international concern over the verdict.
