At the market close the benchmark S&P/ASX 200 index was down 537.30 points or 9.70 percent at 5002.00, while the broader All Ordinaries index was down 532.50 or 9.52 percent at 5058.20.
After falling more than 30 percent in under a month, the ASX 200 was at its lowest level since 2016 -- with Monday the market's largest single day for the year.
A number of stimulus announcements from central banks around the world served only as a warning sign for investors as stocks plummeted, with travel shares particularly hard hit.
"Monday morning saw a flurry of central bank actions aimed restoring order in global financial markets as participants globally continue to weigh the economic impact of the COVID 19 virus," Commsec market analyst Chanuka Herath said.
"The Reserve Bank of Australia (RBA) issued a statement highlighting it readiness to support the market saying it 'stands ready to purchase Australian government bonds in the secondary market to support the smooth functioning of that market, which is a key pricing benchmark for the Australian financial system."
On Thursday, the RBA will announce further measures, to go with the government's 11 billion dollar stimulus package.
In the financial space, Australia's big banks slumped with the Commonwealth Bank down (10.01 percent), ANZ down (12.50 percent), National Australia Bank down (12.44 percent) and Westpac Bank down (11.81 percent).
Mining stocks sank with Rio Tinto down (4.23 percent), BHP down (5.69 percent), goldminer Newcrest down (13.20 percent) and Fortescue Metals down (2.82 percent).
The country's oil and gas producers plummeted with Oil Search down (19.83 percent), Santos down (17.69 percent) and Woodside Petroleum down (14.35 percent).
Australia's largest supermarkets dropped with Coles down (1.06 percent), and Woolworths up (1.97 percent).
Meanwhile telecommunications giant Telstra lifted (1.81 percent), the national carrier Qantas plummeted (5.03 percent) and biomedical firm CSL slumped (10.35 percent).
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