More than one million people gathered along the famed harbour to watch the 12-minute show featuring a multi-coloured firework "waterfall" cascading off the Harbour Bridge and pyrotechnic effects in the shapes of butterflies, octopuses and flowers.
People crowded onto balconies, into waterside parks and onto boats as they jostled for the best view, clinking glasses and whooping with joy as the first fireworks went off.
Thousands also gathered in Melbourne, where 11 tonnes of fireworks were set off.
Security was tight across Australia, with thousands of extra police officers patrolling the country's major cities.
New Zealand, the first country with a sizeable population to celebrate the beginning of 2016, counted down to midnight with a giant digital clock on Auckland's Sky Tower.
Horns sounded and crowds cheered as the tower was then lit up with fireworks, with colours changing from green to red to white.
Japan and South Korea have become the latest nations to enter 2016, kicking off their celebrations at 3pm UK time.
In London, extra armed officers have been called in to police the New Year's Eve celebrations later.
Tickets have sold out for the London Mayor's official fireworks display on the South Bank.
Those without tickets are being advised to see the New Year in at home or at bars across the capital.
Brussels has cancelled its official fireworks display after two men were arrested by police and accused of plotting to attack the event in Belgium's capital.
Paris has also called off its traditional display in the Champs-Elysees as it remains on high alert following last month's terror attacks.
The French capital will also have 11,000 officers patrolling the city compared with 9,000 last year.
Around one million revellers will converge on New York's Times Square for the annual celebration there.
There will be musical acts to begin the event, followed fireworks and the descent of a glittering crystal ball from a rooftop flagpole.
Officials in Las Vegas have urged people to leave bags, backpacks and buggies at home as police prepare for hundreds of thousands of partygoers to flood the Las Vegas Strip.
The huge party on Rio de Janeiro'sCopacabana Beach will have two themes: the 100th anniversary of samba music and the upcoming Olympics, which the Brazilian city will host in August.
More than two million people are expected to converge on the beach.
Security has also been increased in Malaysia's biggest city, Kuala Lumpur.
There, fireworks will ring in the New Year at a historical square as well as at the Petronas Twin Towers, one of the world's tallest towers.
In the Philippines, stray bullets and exploding firecrackers have killed one person and injured almost 200 others as the country celebrates the beginning of 2016.
Three separate fireworks displays are set to wow spectators in Dubai.
The show will start at the Burj Khalifa, the world's tallest building.
Organisers say the tower has been fitted with 400,000 LED lights and 1.6 tons of fireworks will be used in the display.
The fireworks will then light up the sky around the Burj al Arab and later near the Dubai Marina.
China is planning an official celebration near Beijing's Forbidden City, which will include performances and fireworks.
A gala will also be held at the Bird's Nest stadium.
In Thailand, tens of thousands are expected to mark the start of 2016 at the same intersection where a pipe bomb killed 20 people.
Up to 5,000 police will be in the area around the Erawan Shrine in Bangkok, with explosive ordnance disposal experts making a sweep beforehand.
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