The spectators were arrested around the time the race ended Sunday afternoon and were being investigated for "intentional insult with intent to provoke a breach of the peace" and public indecency, state news agency Bernama quoted police saying on Monday.
The nine men, aged between 25 and 29, would be held in remand for four days, Abdul Aziz Ali, police chief of the town of Sepang, told Bernama.
Abdul Aziz said the Australians were tourists who had come to watch the Malaysian Grand Prix, held at the Sepang circuit outside the capital Kuala Lumpur.
Photos of the men flaunting the country's national colours went viral in Malaysia following the race, provoking angry comments from some social media users who accused them of insulting the country.
Displays of public indecency are not tolerated by authorities in Muslim-majority Malaysia, with foreign offenders typically assessed a fine before being deported.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ