Senator Ludlam is in New York with delegates from 120 countries to discuss a treaty to ban nuclear weapons around the world.
He said Australia could have played a vital role in negotiations, but instead chose not to be involved.
“The Australian role has been disgraceful,” he told the ABC’s Lateline program.
“Australian diplomats were instructed, first under Prime Minister Abbott and then Prime Minister Turnbull, to try and obstruct or break up the talks, try to prevent this process from happening at all. Now this process is under way.”
“New Zealand is here. The Netherlands, a NATO country, is here. Why isn't Australia here?”
Indigenous Australians have also criticised the government for not joining the historic discussions, accusing Australia of overlooking its own history of nuclear testing.
In an address to the United Nations, anti-nuclear campaigner Karina Lester described the impact the tests had on herself and her family, with her father going blind from the atomic fallout.
The senator says despite the lack of support from the world’s nuclear powers, as well as Australia, he is hopeful some progress will be made.
But he has slammed the states opposed for dragging their heels.
“We all understand that nuclear weapons are going to be difficult. But honestly, what is the alternative to denuclearisation?” he said.
“The nuclear-armed states have been delaying and sandbagging the rest of the world for decades. This is nine countries - nine executive governments, nine people with authority - to unleash these horrific weapons. It's about time”.
North Korea’s latest missile test has put many countries on edge, with fears an intercontinental ballistic missile launched by the secretive state could reach the United States.
This led to the US, Japan and South Korea requesting an emergency Security Council meeting.
The uptick in tensions has only strengthened Senator Ludlam’s belief in de-escalation.
“The Iranian nuclear weapons program has completely faded from the headlines - not because of the kind of dangerous escalation that we're seeing on the Korean Peninsula, but because of years of really careful and painstakingly diplomacy and deal-making,” he said.
“That is how to bring these tensions down. What we're seeing at the moment is an escalation, which is precisely in the wrong direction”.
- with wires