Andrew Chan and Myuran Sukumaran, the ringleaders of the so-called "Bali Nine" drug smuggling gang, were woken early and given a few minutes to get ready before leaving Bali's Kerobokan jail in the early hours, said local justice ministry official Nyoman Putra Surya.
The men, sentenced to death in 2006 for trying to smuggle heroin out of Indonesia, said "thank you" before leaving, and "we handcuffed them and they were quiet", he added.
About 200 police, 50 soldiers and a water cannon were stationed outside the Bali prison as the men, in their early 30s, were driven out, said an AFP reporter at the scene.
The pair were flown to Cilacap, on Java island, on a chartered commercial flight accompanied by military aircraft.
Two armoured vehicles escorted by elite police then boarded a boat at the local port which crossed to Nusakambangan island, home to several high security prisons and where the pair will be executed, an AFP reporter at the scene said.
Prime Minister Tony Abbott, who has repeatedly called for Jakarta not to go ahead with the executions, said Australians were sickened by the developments.
"We frankly are revolted by the prospect of these executions," he said, adding that "right now millions of Australians are feeling sick in their guts".
Abbott said he hoped there might be a "change of heart in Indonesia", but added: "What I don't want, though, is to hold out false hope.
Even so, he said, "I hope that even at this late hour, the better angels of the Indonesians peoples' nature will reassert themselves".
The men recently lost their appeals for presidential clemency, typically a death row convict's last chance to avoid the firing squad.
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