During the transfer, a senior Indonesian police officer was pictured in photos with the Australian pair on a flight.
Myuran Sukumaran and Andrew Chan were being taken from Kerobokan prison in Bali to Nusakambangan island in Central Java, where they will be held in a maximum security facility before facing a 12-man firing squad.
The date of the execution is not yet known, although the convicted will be informed at least 72 hours before they are put to death.
Australia's Department of Foreign Affairs said it had lodged a formal complaint with the Indonesian embassy in Canberra over the treatment of the prisoners during the transfer, which took place before dawn on Wednesday.
Australian Foreign Minister Julie Bishop told Australian media that an undue show of force, including armored vehicles and dozens of officers in helmets and balaclavas, was also used during the transfer.
"I just cannot comprehend it. They are two men who are described by their own prison governors as model citizens, two gentlemen who pose no risk to anyone," she told the ABC's AM program.
"I cannot comprehend the manner or the method of their transfer to the so-called execution island."
A spokesman for Indonesia's Ministry of Foreign Affairs said the photos were taken without the consent of the officer involved, Commissioner Djoko Hari Utomo.
"The officer was inquiring about the physical condition of Mr Chan," Arrmanatha Nasir told CNN in regard to one of the images. "It is regretful that this photo is being used by the media to portray something more than what it really is."
Prisoner swap dismissed
Australia's complaint comes after Indonesia dismissed a last-minute proposal to save the pair's lives through a prisoner swap.
Nasir told CNN that there are no Indonesian laws that would allow or provide for an exchange.
"Indonesia does not have legislation or laws or any other legal instruments that will enable the issue of a prisoner exchange to be conducted," he said, adding that the Australian government had been informed of this stance.
Sukumaran and Chan, members of the so-called "Bali Nine" smuggling ring, have been held by Indonesian authorities for nearly a decade.
They are expected to be held in a maximum security facility on Nusakambangan where they will be isolated before being put to death.
They are among a number of people from different countries who are also scheduled for execution.
Australian government and opposition parliamentarians attended a candlelight vigil at dawn Thursday, as a spectacular sunrise lit politicians from across Australia's political spectrum, united in opposition to the impending executions.
"We appeal to the Indonesian president to grant a stay of clemency," Bishop told the gathering. She reminded the Indonesian government that legal avenues remained open, before appealing for mercy on behalf of the convicted men's families.
"I've spoken to the families. They are going through an unimaginably difficult time and I ask that you think of the families who are praying that their son, brother, grandson can have their life spared. We appeal again to President Widodo, the leader of a strong and proud country, to show mercy and forgiveness and spare the lives of these two young Australians."
Calls for clemency
Australia has repeatedly appealed for clemency for the pair. They have been jailed since April 2005 for a failed bid to smuggle more than 8 kilograms of heroin from Bali to Australia.
Prime Minister Tony Abbott said people should not let anger affect Australians' relationship with Indonesia.
"We abhor drug crime, but we abhor the death penalty. We think that these two Australians deserve to be punished, but they certainly don't deserve to be executed," he said.
Failed smuggling plot
The Bali Nine were arrested after Indonesian police received a tip from Australian Federal Police.
Chan, 31, was called the ringleader of the plot, and Sukumaran was described as Chan's collaborator in the scheme. Seven other people who participated in the plan are serving lengthy prison sentences.
Police caught four people at the Denpasar airport with more than 8 kilograms of heroin strapped to their bodies.
Another four -- including Sukumaran -- were arrested at a hotel in the village of Kuta. Chan was detained after a boarding a plane to Sydney -- he wasn't carrying any drugs but was named by others as the mastermind of the plot.
The Indonesian administrative court last week dismissed a case filed by lawyers of the two Australians against President Joko Widodo. The attorneys wanted a review of the president's decision to deny them clemency.
Todung Mulya Lubis, who represents the pair, said a challenge had been submitted to the administrative court and lawyers were still waiting for a court summons.
"There should be no execution as long as there is a legal process going on," Lubis said.
Sukumaran and Chan have become model prisoners during their time behind bars, according to fellow inmates and the jail's chief warden. Sukumaran is studying fine arts and has set up a class for fellow inmates. Chan has found spirituality, which he uses to counsel inmates with drug problems.
Their rehabilitation is genuine, Bishop has previously said.
"Andrew and Myuran are the model of what penal systems the world over long to achieve," she told the Australian Parliament in February.
Death for drugs
Indonesia has long taken a tough line on drug smugglers, and Widodo has made it clear he doesn't intend to introduce a policy of leniency.
In December, six prisoners were killed by firing squad
, including five foreigners from Brazil, the Netherlands, Malawi, Nigeria and Vietnam.
Brazilian President Dilma Rousseff issued a statement saying the execution of one of her countrymen had "severely affected" relations with Indonesia.