Satellites have captured impressive images of a large cut-off low pressure system drifting over southeastern Australia during the last two days.

But while this low is creating captivating patterns in the sky, it's also producing severe weather in multiple states.

The image below shows the low positioned over NSW on Tuesday afternoon.

Blue areas in the image are clouds, while the black and orange areas are clearer skies.

The clouds around the cut-off low have been causing a mix of dynamic weather in parts of NSW, Victora and Queensland during the last couple of days.

On Tuesday, a series of waterspouts were spotted off the NSW coast as cold upper-level air moved over the relatively warm Tasman Sea. This combination caused moisture-laden air to rise rapidly and spin, giving birth to a flurry of funnel-shaped clouds. One image showed five waterspouts spinning concurrently.

Image: Waterspouts near Old Bar on Tuesday. Source: @oldbarbs / Instagram

There has also been heavy rain, with some rain gauges in eastern Victoria and southern NSW collecting more than 100mm during the 24 hours to 9am on Wednesday.

By midday on Wednesday, the upper-level cut-off low was located over northeast NSW and southeast Queensland, where it was producing showers and a few thunderstorms. Some of these storms could become severe during Wednesday afternoon and evening.

A deep layer of moisture-laden onshore winds to the south of the low is also causing persistent rain over southeastern NSW today.

Some of this rain will be heavy enough to cause flooding on Wednesday and Thursday, with a severe weather warning in place for most of the coast and adjacent ranges between about Wollongong and Merimbula.