Officials say 35-year-old Katiya Graham was arrested along with four other Nepalis over allegations of going to homes of local people to convert them to Christianity.
The incident took place around three weeks ago in the western part of Nepal, Bardiya.
"The District Administration Office from Bardiya forwarded the case to and Ms Graham herself accepted the charges filed against her," said Bishnu Hari Upadhaya, Director at Department of Immigration.
According to Upadhaya, the Sydney woman was on a student visa when she was arrested. Graham has been barred from entering Nepal for five years.
''Graham's case was not registered in the court as she confessed to her crime while giving statement otherwise she would have to abide by the court's sentence," said Upadhaya.
"We checked with her college and there were no field assignments in that part of the country and she had been absent for some time."
Officials say Graham had admitted herself at a college in Katmandu.
Ms Graham herself accepted the charges filed against her," said Bishnu Hari Upadhaya, Director at Department of Immigration.
Spreading religion and converting religion of people is illegal in Nepal. Graham and four other Nepalese were caught by the local police with Bibles and pamphlets about Christianity said Mahendra Jung Shahi, information Officer at District Administration Office, Bardiya.
"We were alerted about this group's suspicious activity by the local people," added Shahi.
Graham is not the first foreigner to be deported for trying to convert religion. According to officials at Department of Immigration two Japanese women and a couple from Philippines had also been deported for similar offence.
Authorities say foreigners are mostly arrested for illegally involvement in drugs, weapons, carrying illegal passports and cyber crime among others. Of late few cases with charges of sexually assaulting minors has also been filed against foreigners say officers at Department of Immigration.
"Such cases are then taken to court and if found guilty they will carry out the sentence in Nepal's jail or deported as per the verdict," said Upadhaya. "They can return once the deportation period is over."
According to officials, foreigners who have overstayed their visa are banned from entering Nepal within that year and depending upon the offence deportation period can go up to 10 years.
Tourism operators say police keeps an eye on foreigners involved in suspicious activities otherwise foreigners are left on their own in Nepal as the country's economy heavily depends on tourism.
