Police say three Australians have been arrested in Serbia over the second largest cocaine haul in Australian law enforcement history.

Serbian police allege the men arrested in a Belgrade hotel lobby on Wednesday are linked to the discovery of 1.28 tons of cocaine that was seized last April on a Chinese freighter docked in Sydney. Police in Australia said the drug haul, concealed in pre-fabricated steel in more than 2,500 individual blocks, was worth 500 million Australian dollars ($400 million).

After the Serbian arrests, Australian police executed five search warrants in the national capital Canberra and three towns in New South Wales state. No arrests have been made in Australia, but investigations continue.

The largest Australian drug haul was 1.4 tons in February last year found on a yacht.