The Australian Federal Police has charged a 59-year-old Sydney man who allegedly worked as a black-market agent to sell missile components and coal for North Korea.

Authorities said it was the first time a person in Australia had been charged with brokering sales and discussing the supply of weapons of mass destruction.

The AFP said the man, Chan Han Choi, had breached both the United Nations and Australian sanctions.

He was allegedly acting as an economic agent of North Korea and generating income for the North Korean Government through his facilitation of various exports from the country.

The AFP will allege Chan Han Choi was involved in brokering sales of missile components, including software for the guidance of ballistic missiles, as well as North Korean military expertise, to international entities.

Authorities claimed he was also attempting to transfer coal from North Korea to entities in Indonesia and Vietnam.

He has lived in Australia for more than 30 years and is believed to be of South Korean descent — but is not a South Korean citizen.

He was arrested by the AFP in the Sydney suburb of Eastwood.

'Loyal agent' allegedly working in black market

AFP Assistant Commissioner Neil Gaughan said, if successful, the trades could have been worth "tens of millions of dollars".

However he clarified there was no evidence of involvement by officials from Indonesia or Vietnam.

"This is black market 101," he said.

"People trying to use the black market to get things they shouldn't get hold of and receive money in return.

"This man was a loyal agent of North Korea, who believed he was acting to serve some higher patriotic purpose.

"I think at the end of the day he would sell whatever he could to make money back for the North Korean government."

The "loyal agent" allegedly attempted to generate revenue for Kim Jong-un's regime, which faces economic sanctions from the UN and Australia. ( KCNA via KNS )

The AFP said no weapons or missile componentry ever came to Australia, and authorities said there was no threat to the Australian community.

Assistant Commissioner Gaughan said Mr Chan had been under investigation since earlier this year, after the AFP received information from its international law enforcement partners.

He was arrested and charged in Sydney on Saturday.

Prime Minister Malcolm Turnbull praised the AFP and said it was vital sanctions against North Korea were enforced.

"The more economic pressure that can be brought onto North Korea, the sooner that regime will be brought to its senses," he said.

Assistant Commissioner Gaughan said the investigation was ongoing, and refused to rule out further charges.

The maximum penalty for the offences is 10 years' imprisonment.