Police are investigating how a prisoner escaped Goulburn’s super-max jail, after the fugitive was arrested following a high-speed chase on a New South Wales highway.

Stephen Jamieson is back behind bars after he managed to flee from an exercise yard attached to his cell at the Goulburn Correctional Centre around 12.30pm yesterday.

He used a hacksaw concealed between his buttocks to cut threw a wire fence, then scaled a prison wall using bedsheets and a pillow to protect him from the razor wire. He then cut through a third fence and fled.

Jamieson made a brief court appearance today before he was returned to the facility.

Premier Mike Baird said the escape was “completely unacceptable”.

Stephen Jamieson. (Supplied)

“I think like every member of the community, when I saw that I was gobsmacked, and certainly we need to do everything possible to ensure it doesn’t happen again,” Mr Baird said.

Following the prison break, a large air and land manhunt commenced for the 28-year-old, a convicted armed robber, with police using dogs and helicopters to search for him.

He was spotted driving an allegedly stolen Nissan ute on the Hume Highway at Narellan, nearly 150km from Goulburn, at about 10.50pm.

Police arrested the man after he allegedly tried to flee from the ute. (Supplied: NSW Police)

Jamieson allegedly used bedsheet to escape the prison. (9NEWS)

Police tried to stop the vehicle and a chase ensued, with officers deploying road spikes at Pheasants Nest.

Jamieson attempted to flee the scene but was arrested a short distance away.

He was taken back to Goulburn Police Station and charged with escape lawful custody, illegal use of a motor vehicle, unregistered/uninsured, unlicensed driver, and police pursuit (Skye's Law).

Bail was refused and he briefly appeared in Goulburn Local Court late today before being returned behind bars.

Yesterday NSW Corrective Services Commissioner Peter Severin said Jamieson had recently been placed in segregation from the prison population after a small cavity was found in a workshop at the jail.

The cavity, only 60cm deep, was found beneath a cabinet in the prison's furniture workshop on August 3. Jamieson was one of the suspects, Mr Severin said.

"He was able to leave a small secure exercise yard that is attached to each segregation [cell]. That is common design practice right across the state and other facilities.

"He had a range of bedsheets that he tied together that he was then able to swing over the wall and then effect his escape by scaling that wall.

"It appears that he also had a pillow that [was] put around his waist and enabled him to make good his escape over the razor wire."

He was serving a 12-year sentence for armed robbery after being taken into custody in 2013.

Mr Severin said the man had previously escaped jail while serving a prior sentence.

"There is clearly, absolutely no excuse for anybody being able to escape from maximum security," Mr Severin said.

"This is an incident that needs to be followed up very swiftly."

Mr Severin stressed that Jamieson was being held in the maximum-security section of the prison, not Goulburn's Supermax facility.