The man, 23, went missing from Pakistan navy ship PNS Nasr on Sunday evening and it was initially believed that he had fallen overboard while the ship was anchored in Darwin Harbour as part of the bi-annual Exercise Kakadu, The Australian reported.
But police said it became apparent that he did not want to be found after they discovered his plastic wrapped backpack floating on the water near the Cox Peninsula and was spotted by a worker near Talc Head.
Police found him hiding in a shed late Monday night. He is now with immigration authorities.
Exercise Kakadu, running from Aug 25 to Sep 12, is the navy's largest maritime warfare exercise.
Eight warships and 26 navy and air-force aircraft from the Asia Pacific and Indian Ocean region are participating.