A police dog has helped catch a 74-year-old woman who was allegedly selling drugs at Sydney's Central Railway Station.

Officers were alerted to the woman by the sniffer dog during a routine operation at the station just after 4:00pm (AEST).

The woman was allegedly found with more than 40 small bags of cannabis in her handbag.

A search of her nearby home at Surry Hills allegedly uncovered more bags and a small amount of cannabis.

Inspector Mark Christie says the officers involved were surprised.

"It certainly wasn't what they were expecting. In fact it's certainly not what everyone's expecting," Inspector Christie said.

"That's the benefit we get from these drug dog operations. They pick up the scent not the individual.

"That's why it makes it more difficult for those that are involved in that type of activity to get around and do their business."

The woman has been charged with possessing and supplying illegal drugs and released on bail to face court next month.