Peter Luke, 27, died while surfing five-metre waves off Jelenga Beach in West Sumbawa.
Friend Levi Muddle wrote on Facebook that Mr Luke's "bright aura" and passion for life were contagious.
Police in Indonesia said Mr Luke's body was recovered from a reef by his two friends who were looking for him after he went missing on Monday.
West Sumbawa police chief Teddy Hendyawan Syarif said the surf at the spot known as Scar Reef was huge at the time.
"The victim's death was caused by a wave smashing into him, which at that time was massive, up to five-metres high," he told reporters.
The Warrnambool-born teacher was a skilled soccer player, previously captaining the premier division team of the Lennox Head Football Club in NSW, which paid tribute to him on its Facebook page.
"Petey was a much loved member of the Sharks family and will be sorely missed by many," the club wrote.
Baz Carolan, a friend from Whistler where Mr Luke had worked in the Canadian ski fields, said he'd never forget their adventures.
"I'll miss you so much Peter Luke, greatest guy I've met during my adventures," Mr Carolan wrote.
Indonesian police are co-ordinating with Australian authorities to repatriate Mr Luke's body.
A spokesperson for the Department of Foreign Affairs and Trade said: "Consular officials are providing assistance to the family of an Australian man who has died in Indonesia."
The island of Sumbawa lies to the east of better-known islands Lombok and Bali, but its waves lure surfers who are willing to make the trek.
The video below shows a Rip Curl pro surfing event held at the beach.