The dramatic shift in the search area, moving it further than the distance between London and Berlin, followed analysis of radar and satellite data that showed the missing plane had travelled faster than had been previously calculated, and so would have burned through its fuel load quicker.
Australia said late on Friday that a New Zealand air force plane had spotted objects in the new search area. The sightings would need to be confirmed by ship, which was not expected until Saturday, the Australian Maritime and Safety Authority (AMSA) said.
"We're still waiting on imagery ourselves," said an AMSA spokesman.
The latest twist underscores the perplexing and frustrating hunt for evidence in the near three-week search for Malaysia Airlines Flight MH370, which vanished from civilian radar screens less than an hour into a Kuala Lumpur to Beijing flight.
Malaysia says the plane was likely diverted deliberately but investigators have turned up no apparent motive or other red flags among the 227 passengers or the 12 crew.
Malaysian officials said the new search area was the result of a painstaking analysis of Malaysian military radar data and satellite readings from British company Inmarsat carried out by US, Chinese, British and Malaysian investigators.
Engine performance analysis by the plane's manufacturer Boeing helped investigators determine how long the plane could have flown before it ran out of fuel and crashed into the ocean, they said.
"Information which had already been examined by the investigation was re-examined in light of new evidence drawn from the Inmarsat data analysis," Malaysia's acting Transport Minister Hishammuddin Hussein told a news conference.
For more than a week, ships and surveillance planes have been scouring seas 2,500 km (1,550 miles) southwest of Perth,
Ten aircraft searching on Friday were immediately re-directed to the new area of 319,000 sq km (123,000 sq miles), roughly the size of Poland, around 1,850 km (1,150 miles) west of Perth. The Australian Geospatial-Intelligence Organisation was also redirecting satellites there, AMSA said.
A flotilla of Australian and Chinese ships would take longer to shift north, however, with the Australian naval ship the HMAS Success not due to arrive until Saturday morning.
The new search area is larger, but closer to Perth, allowing aircraft to spend longer on site by shortening travel times. It is also vastly more favourable in terms of the weather as it is out of the deep sea region known as the Roaring 40s for its huge seas and frequent storm-force winds.
"I'm not sure that we'll get perfect weather out there, but it's likely to be better more often than what we've seen in the past," John Young, general manager of the emergency response division of Australian Maritime Safety Authority (AMSA), told reporters, adding the previous search site was being abandoned.
"We have moved on from those search areas to the newest credible lead," he said.
The Australian Transport Safety Bureau (ATSB) said earlier that the shift was based on analysis of radar data between the South China Sea and the Strait of Malacca. At that time, the Boeing 777 was making a radical diversion west from its course.
Malaysia's civil aviation chief, Azharuddin Abdul Rahman, said at Friday's news conference he was "not at liberty" to give the exact path of the aircraft. Officials close to the investigation told Reuters last week that the plane may have passed close to Port Blair, the capital of India's Andaman and Nicobar Islands, 550 miles (885 km) further northwest from where Malaysia has said its military radar last detected it.
The shift comes less than a day after the latest reports of sightings of possible wreckage, captured by Thai and Japanese satellites in roughly the same frigid expanse of sea as earlier images reported by France, Australia and China.
Images had shown suspected debris, including pieces as large as 24 metres (70 ft), within the original search area in the southern Indian Ocean.
Potential debris has also been seen from search aircraft, but none has been picked up or confirmed as the wreckage of Flight MH370.
Hishammuddin said it was still possible that those objects were debris from the plane, as any wreckage could have been swept hundreds of miles from the crash site by now.
"Because of ocean drift, this new search area could still be consistent with the potential objects identified by various satellite images over the past week," he said.
The U.S. Navy said on Friday it was sending a second P8-Poseidon, its most advanced maritime surveillance aircraft, to help in the search.
"It's critical to continue searching for debris so we can reverse-forecast the wind, current and sea state since March 8 to recreate the position where MH370 possibly went into the water," said Commander Tom Moneymaker, a US 7th Fleet oceanographer.
The United States has also sent a device that can be towed behind a ship to pick up faint pings from the plane's black box voice and data recorders, but time is running out.
"We've got to get this initial position right prior to deploying the Towed Pinger Locator since the MH370's black box has a limited battery life and we can't afford to lose time searching in the wrong area," Moneymaker said.