https://www.bbc.com/news/world-australia-46463029
Cyber-security experts have warned the laws could now create a "global weak point" for companies such as Facebook and Apple.
It differs from laws in China, Russia and Turkey, where services offering end-to-end encryption are banned.
Under Australia's legislation, police can force companies to create a technical function that would give them access to encrypted messages without the user's knowledge.
However, cyber-security experts say it's not possible to create a "back door" decryption that would safely target just one person.
"Any vulnerability would just weaken the existing encryption scheme, affecting security overall for innocent people," said Dr Chris Culnane from the University of Melbourne.
Such a "security hole" could then be abused or exploited by criminals, he said.
In a bid to address these concerns, Australia's law offers a safeguard which says decryptions won't go ahead if they create a "systemic weakness".
However critics say the definition of "systemic weakness" is vague, meaning it is unclear how it may be applied.
Are you concerned with possible spillover effects from this law in other countries? What sort of unintended consequences could this law bring about?