Police have found the propeller that fell off a Regional Express Airlines (REX) plane during a flight from Albury to Sydney last Friday.

The propeller that fell off the Rex Airlines flight has been found in bushland at Revesby Heights. ( Twitter: @7NewsSydney )

A police helicopter spotted the propeller in bushland off the River Road in Revesby, in Sydney's south-west.

The bushland the propeller was found within is near Sandakan Road and just metres from many homes.

The SAAB 340B plane was forced to make an emergency landing after the propeller fell off mid-air on Friday.

The first officer saw the propeller separate and travel upwards and away from the aircraft. The flight, which had 16 passengers and three crew on board, landed safely at Sydney Airport.

Since the propeller detached from the engine, the ATSB has been calculating its likely trajectory, using data from the aircraft's flight data recorder.

The ATSB is now working with police to recover the 100-kilogram propeller so the cause of its detachment can be determined.

REX's chief operating officer Neville Howell said: "The propeller will be vital in assisting the ATSB with their investigations."

He also took the opportunity to correct allegations that the aircraft should have been diverted to Canberra.

The propeller was found in the bushland near the Gurawak Fire Trail, adjacent to Sandakan Road. ( Supplied: Google Earth )

"The aircraft was some 20 kilometres away from Sydney airport when the engine was shut down and the propeller separated.... it would be ludicrous for the pilot to divert the aircraft 250 kms to Canberra airport."

He also clarified they would not be grounding aircraft as reported on Monday but would replace the gear boxes and shafts (within the same series as the separated propeller) of five aircraft.

Mr Howell said the incident was an "extremely rare event".

"The one other recorded similar event was in 1991, when US carrier Comair's aircraft also landed safely after a separation of its propeller," he said.

The Australian Transport Safety Bureau has assigned three investigators to look into the circumstances surrounding the incident.

They are looking to find out whether it is a potential defect in all SAAB 340B aircraft or just the one in question.