CFMEU SA secretary Dave Kirner says he was tipped off about the waste at Pelican Point, northwest of Adelaide, by an environmental group.
He says he found asbestos submerged in piles of corrugated roofing material and dumped in bags when he inspected the beach on Thursday night.
"There's about a tonne of asbestos in three piles," he told ABC radio on Friday.
"In our view it was probably a commercial contract job and they've gone and made a bigger profit on the job by going and dumping this asbestos."
The beach is a popular spot for quad bikers who may have driven over the asbestos, Mr Kirner says.
"When I was there, there was a family there with a five-year-old kid," he said.
"There's community interaction all around the asbestos, so we want to get it stopped straight away."
The Environment Protection Authority has sent an emergency response team to the site to take samples of the asbestos. Individuals caught dumping waste can be jailed for a maximum of two years or fined up to $120,000.
Businesses can face fines of up to $250,000.
"The EPA takes these matters very seriously and has acted swiftly to ensure that public health and safety of the environment are not compromised," spokesman Andrew Wood said.