Construction workers who inadvertently bored into an electricity cable caused a blackout to thousands of homes and businesses on Sydney's lower north shore on Wednesday afternoon.

The outage affected about 3700 homes and businesses, as well as traffic lights on Military Road.

Emergency crews from Ausgrid were called in to investigate the outage and restore power, and found construction work had damaged an underground electricity cable in Mosman.

Live Traffic NSW reported that traffic lights were blacked out on Military Road at the Murdoch Street, Ourimbah Road and Awaba Street intersections, as well as Spit Road at Parriwi Road, but were working normally again as of 3.45pm.

Ausgrid says supply was interrupted about 1.30pm on Wednesday and affected parts of Cremorne, Cremorne Point, Mosman, Neutral Bay and Kurraba Point.

Power was restored to all areas except a small pocket of around 100 homes and businesses in Cremorne by 4.20pm, and fully restored by 6.30pm.