"The Department of Foreign Affairs and Trade advises that it has credible information that terrorist groups with a history of targeting Westerners and Western interests may be planning terrorist activity on or about 23 March in Surabaya, Indonesia," the ministry said in a statement.
Australians were warned not to travel to Surabaya and those already there were advised to stay home and exercise extreme caution.
They should avoid commercial and public places frequented by foreigners including clubs, restaurants, bars, hotels, schools, fast food outlets, shopping centers, places of worship, public transport and any buildings associated with foreign interests, the foreign ministry said.
The statement said Surabaya, on Indonesia's main island of Java, has been the scene of street protests over U.S.-led military attacks in Iraq. Australia has contributed 2,000 troops to the war in Iraq.
The statement did not say which group might launch an attack.
The Australian government issued a general warning telling Australians to avoid travel to Indonesia following the Oct. 12 Bali bomb blasts last year which killed more than 200 people, including 89 Australians.
"We continue to advise Australians to defer nonessential travel to Indonesia including Bali," the foreign ministry statement said.