They were found on Boigu Island and had been placed in detention, Senator Vanstone said.
"The three men, who had travelled on a small unpowered native boat, were intercepted by immigration officials at Boigu Island on May 6," she said in a statement.
She said early indications were that they arrived from Papua New Guinea after having previously crossed from the Papua province of Indonesia.
"They are currently on Horn Island and are in good health," Senator Vanstone said,
The island, which is Australian territory, had previously been excised from Australia's migration zone, and the men had been classified as offshore entry people.
"If they were to seek protection, they will not be processed in Australia and are not entitled to make any application under the Migration Act.
"As they arrived from PNG, which is party to the Refugees' Convention, return options to PNG first need to be explored. My department is currently working with the Department of Foreign Affairs and Trade in relation to this option."
The granting of refugee protection for 42 Papuans who landed on
Cape York Peninsula in January sparked anger in Indonesia where there was concern Australia was displaying tacit support for Papuan independence.
In a bid to heal the diplomatic rift, Australia agreed to review its immigration procedures to ensure all future boat arrivals would be processed offshore.