The group is a non-profit corporation that oversees management of domain names and IP addresses, Internet Protocol address space allocation and generic top level domains.
ICANN board chair Peter Dengate Thrush said national Internet content filters are ineffective at law enforcement.
The plan was introduced by federal Communications Minister Stephen Conroy ostensibly as a mechanism to control distribution and access to child pornography.
"The government has set itself up for embarrassment," Thrush said.
"I have no problems with the principle behind it [but] censoring material outside the country is difficult and the tools to do it cost a lot."