A koala was found dead with its ears cut off in a "disturbing" case of animal cruelty, Australian police have said.

The marsupial was discovered at the side of a road near Warrambool, a town 250km west of Melbourne on Monday (November 10). Police are unsure if the animal was still alive when it was mutilated.

Warrembool's Sgt. Pat Day called the incident "disgusting" and said it was yet another case of cruelty in the area.

"There's no reason for anybody to wish to treat an animal in this way, whether alive or dead," he told local media.

"Deliberate cruelty towards any animal is a very serious issue," spokeswoman Sophie Buchanan told AAP. "Both because of the harm it causes to the animals themselves, and also because research consistently demonstrates a link between cruelty to animals and violent behaviour towards people."

Last year a Snapchat video surfaced of a group men repeatedly stamping and torturing a kangaroo which had been run over by a truck. It also showed the men stubbing out cigarettes and stabbing the animal.

Under Australia's current Animal Welfare Act, penalties for aggravated animal cruelty can carry up to four years imprisonment or a fine and a fine of A$50,000 (£29,000).

Australia has seen a sharp decline in koala numbers due to a combinations of declining habitats, dog attacks and bush fires. There are believed to be 100,000 left alive in the wild.