President Yoon Suk Yeol made the declaration to suspend ordinary laws and impose the military as decision-makers late on Tuesday, citing "anti-state forces" among his political opponents.
But hours later the South Korean parliament unanimously voted the ploy down, much to the delight of protesters stationed outside the national assembly.
Australia's Foreign Affairs Department has updated travel advice due to the political crisis, although the official line remains to "exercise normal safety precautions".
Australians in South Korea should avoid protests and follow advice of local authorities. (Lukas Coch/AAP PHOTOS)
"The situation in South Korea is evolving due to developments in domestic politics," the updated advice said.
"Avoid protests and demonstrations … sites like Gwanghwamun Square and Yeouido in Seoul may have larger crowds and more protest activity than usual."
Transport and other essential services might be disrupted and visitors are urged to monitor the media for updates and follow the advice of local authorities.
Finance Minister Katy Gallagher said the uncertainty should cause Australian travellers to act with caution.
"The best message we can give on this unfolding situation is for any Australians in South Korea to really listen to official advice," she told ABC TV on Wednesday.
"Stay away from some of the mass gatherings as we continue to get across and understand the full implications of what's happened overnight."
It was the first time martial law had been declared in South Korea in more than four decades.
Opposition parties promised to impeach the president for his actions.
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