Speaking at a smartcard conference in Sydney, DFAT's head of passports, Bob Nash, rejected criticism the new passport would not be a durable, long-term solution.
"Lots of people in the US and others tell me this [system] won't last for more than five years," Nash said.
"Then why would the manufacturer guarantee it for 12 years?" he asked.
The facial recognition system includes 16 page passport booklets containing microchips produced by Sharp Corporation.
"We've hit them with hammers, we've broken them...we've poured beer on them!," he said, referring to testing.
DFAT had also conducted tests in Japan of the passports under 16 different electronic scanning devices. Only one machine failed to read the passport due to its own configuration issues, he said.
DFAT currently pilots the e-passport using its 'Smartgate 2' biometric devices in Sydney and Melbourne airports. Since December, a group of 2500 Qantas staff have tested the system on their re-entry to Australia.
"We've had no failures in the 2,000 [passports] currently being tested by Qantas staff," Nash said.
The results meant the system was "98 percent accurate" at the moment, he said.
About 10 000 e-passports have already been mass-produced, according to Nash.
The main challenge of the project then would be comparing e-passport applicants' identities with the "several million images" on DFAT databses, he said.
E-passports will only be issued to individuals needing replacements, rather than DFAT recalling every passport in Australia.
Still, the matching of prospective e-passport holders to the database was not an easy task, according to Nash.
Some cases of multiple matches with the database had occurred, he said.
"We had one bloke who has six [matches on the system]!"
Nevertheless, the October launch date would be achieved, Nash said.
"We've been working on this for five years.
"And we will be one of the first countries to introduce an e-passport."