An Australian traveller says he was horrified to find a live koala for sale at a restaurant in southern China where the menu was offering the iconic marsupial for dinner in either "braised or stewed" varieties.

A sign on the cage holding the animal advertised "koalas" for purchase at a rate of 139 yuan ($A20) for 500 grams.

An Australian traveller says this animal, purported to be a koala, was a menu item at a Chinese restaurant.

It was one of a number of live exotic animals, including birds and fish, on display at the restaurant in Panyu district, Guangdong.

The traveller, who visited the area last week, got down on his hands and knees and snapped a photograph of the caged animal, which was lying next to a carrot.