Gravity anomaly trends from the southern margin of Australia and its associated ‘margin basins’ support the hypothesis that margin formation has been related to two distinct phases of lithospheric extension. Seismic data indicate that extension with a northwest to southeast orientation led to formation of the Eyre Sub‐basin in the pre‐Late Jurassic (Oxfordian): the gravity trends indicate that extension probably took place throughout the region west of the Otway Basin. Extension with a north‐northeast to south‐southwest orientation created the Gippsland Basin in the Early Cretaceous and, as indicated by the gravity, appears to have extended across the entire Otway‐west Tasmania‐South Tasman Rise portion of the margin.