A 74-year-old woman has been charged with selling drugs after more than 40 bags of marijuana were found in her handbag, police say.

Police were using drug dogs in an operation near Central station yesterday afternoon, when they stopped and searched the elderly woman on George Street.

She was arrested when officers found the small resealable bags of marijuana in her bag, police said.

Officers searched her home on Goodlet Street, Surry Hills, and allegedly found more of the drug.

She has been charged with supplying and possessing prohibited drugs and will appear in Downing Centre Local Court on July 21.