The dual code international was arrested along with another man in Brisbane's bar district of Fortitude Valley, state broadcaster ABC said. He had been charged with two counts of drug possession and was due to appear in court again on Jan. 29.
"Rugby Australia (RA) has today been made aware of an incident involving Wallabies and Queensland Reds back Karmichael Hunt in Brisbane overnight," RA said in a statement.
"Rugby Australia takes all matters relating to the off-field behaviour of its players seriously and has commenced an investigation into the incident in conjunction with the Queensland Rugby Union."
Hunt was born in Auckland in 1986, starting his Rugby League career with the Avondale Wolves before moving with his family to Brisbane aged 11.
Hunt, who had successful stints in top-flight rugby league and Australian Rules football before crossing to rugby union, was fined by a Gold Coast court in 2015 after pleading guilty to four counts of possessing cocaine.
Rugby Australia, then known as the Australian Rugby Union, fined Hunt A$30,000 (NZ$33,022) and suspended him for six weeks of Super Rugby.
A regular fullback who made his Wallabies debut at inside centre against Fiji in June, Hunt signed a two-year contract extension to 2019 with Rugby Australia last month.
