Admiral David Johnston told a parliamentary hearing on Wednesday the People's Liberation Army-Navy is 250km south of Hobart.
The group appears to be moving west.
Liberal Senator James Paterson asked the admiral if the three Chinese warships were likely to be getting support from a submarine.
"I don't know whether there is a submarine with them. It is possible. Task groups occasionally do deploy with submarines but not always. I can't be definitive whether that's the case," Adml Johnston said.
Airservices Australia has confirmed the organisation became aware of the risk to aircraft at 9.58am on Friday after a Virgin pilot heard the transmission on an emergency frequency.Â
Adml Johnston labelled the notice provided by the Chinese military as "inadequate".
"The conduct of their activities was clearly disruptive," he said.
"It doesn't demonstrate the best practice that we would expect from mariners operating in that region, so it sure falls short of the standard that we apply to ourselves. And in that sense, it was irresponsible."
He said there was no prior notification from the Chinese military or government before the live firing exercise on Friday, and then Saturday.
Adml Johnston said the Australian military did not conduct firings near civil aircraft or civil maritime routes.
Defence secretary Greg Moriarty said he thought the Chinese were "signalling".
"They are practising and rehearsing, and they are collecting," he said.
Forty-nine flights had to be diverted on Friday due to the Chinese navy's broadcast that it was undertaking hazardous activity.
Defence officials were also grilled over the chronology of communication with the government, after a fighter jet fired flares in front of a RAAF surveillance aircraft flying over the South China Sea.
Representing Defence Minister Richard Marles, Labor senator Jenny McAllister said the government had expressed its concerns through all official channels, in comparison to the "public chest beating" preferred by the former coalition government.
Adml Johnston said he was part of a briefing with Mr Marles on the morning of February 13.
Prime Minister Anthony Albanese said the government was conscious of the presence of Chinese ships, and that the Australian and New Zealand militaries were observing the group.
Opposition Leader Peter Dutton said "significant questions" remained over when the defence minister had been briefed.