More than 300,000 people have turned out in a fabulous sea of rainbow colour for the 41st Sydney Mardi Gras parade.

Under the theme "fearless", the 2019 parade featured 12,500 people on 200 floats marching, dancing and flaunting colourful costumes down the streets of central Sydney on Saturday night to celebrate all things LGBTQI.

Rainbows, giant pot plants and an oversized yak were among the quirky floats, while the music of Queen, PNAU, Daft Punk and John Farnham reverberated through the city's gay district for the annual party.

More than 200 floats were featured in this year's parade. ( ABC News: Kevin Nguyen )

Sydney Mardi Gras joined forces with gay rights advocates in Indonesia for a special float walk. ( ABC News: Kevin Nguyen )

Kylie Minogue made a brief appearance with an ensemble of dancers clad in white shirts, gold cowboy hats and red scarves.

The iconic pop darling, wearing a gold one-shouldered dress, waved to cheering crowds, hugged some and exited the parade as quickly as she entered.

Rumours of an appearance by Kylie Minogue turned out to be true. ( ABC News: Kevin Nguyen )

Minogue's dancers tried to sneak down the parade route for her appearance. ( ABC News: Kevin Nguyen )

For the first time, Aboriginal and Torres Strait Islanders formally welcomed revellers, with an Indigenous smoke ceremony marking the start of the parade.

The dykes on bikes then revved up the crowd, as they do every year around 7:00pm, with 100 motorcycles roaring down Oxford Street, warming the pavement for the floats to follow.

The First Nation floats were among the first to greet the crowd and were followed by LGBTQI representatives from hundreds of corporate, sporting, government and charity groups.

Keen punters lined the street throughout the day to secure the best viewing spots. ( ABC News: Kevin Nguyen )

More than 100 motorcycles roared down Oxford Street. ( ABC News: Kevin Nguyen )

The atmosphere of this year's parade seemed more relaxed, a year after same-sex marriage passed in Federal Parliament.

However, organisers said there were more political displays this year — state Coalition voting posters were featured on the Liberal Party's floats — to coincide with an election year.

With the parade well underway, State Opposition Leader Michael Daley and federal Labor MP Anthony Albanese stopped and posed for photographers.

As the Labor members grouped, a man in drag photobombed them by laying at their feet, sparking laughter from the crowd.

The parade officially finished at 11:00pm but the party continued in nightspots across Sydney. ( ABC News: Kevin Nguyen )

There were plenty of pouts, poses and pictures taken throughout the celebrations. ( ABC News: Kevin Nguyen )

Earlier in the day, eager party-goers had lined up along the Oxford Street barricades — some since the morning — to get the best vantage point to watch the parade.

Olivia Cepeda, 16, said she was excited to be at her first Mardi Gras and parading with a Latin American-Australian group.

"I'm with a great group who make me feel really comfortable," she said.

For her, the fearless theme meant "you can be whoever you want to be without the fear of being judged".

"Everyone has the right to be themselves," she said.

Olivia Cepeda (right) was excited to be part of her first Mardi Gras. ( ABC News: Kevin Nguyen )

Mardi Gras chief executive Terese Casu said the theme was the perfect sentiment for this year's parade, as a way of celebrating what the community had achieved.

"But that word, fearless, also has a vulnerability to it," she said.

"It's about embracing that we are fearless if we say we're not OK, or if we need help or stand up for someone else."

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This year's parade comes as Sydney Mardi Gras confirmed it was bidding to host the World Pride event for 2023.

The biannual festival will be held in New York in July and Copenhagen in 2021.

The parade officially concluded at 11:00pm and Sydney's lockout laws were relaxed across venues in Oxford Street and the Darlinghurst area for the parade.

Last drinks, however, were called at 3:00am for most establishments.

Colourful costumes were worn by many at Mardi Gras ( ABC News: Kevin Nguyen )