"These dust storms are some of the largest in the last 70 years," said Nigel Tapper, an environmental scientist at Monash University.
"Ten very dry years over inland southern Australia and very strong westerlies have conspired to produce these storms."
The storm travelled from southern Australia to New Zealand some 1,400 miles (2,220 kilometers) away.
Officials said particle pollution in Sydney's air rose to the worst.
New South Wales state ambulance service said it received more than 250 calls before midday from people suffering breathing problems.
International flights were diverted from Sydney to other cities.
Three from New Zealand were turned around altogether.
Passenger ferries on the city's famous harbour were also stopped for several hours for safety reasons.