Police have allegedly found almost $1 million in cash hidden in a driver's fuel tank in the outback New South Wales town of Broken Hill.

Key points: Police pulled over the car in Broken Hill, a mining town in far west NSW

Police pulled over the car in Broken Hill, a mining town in far west NSW After a search of the car, police discovered a fuel storage tank where the money was allegedly hidden

After a search of the car, police discovered a fuel storage tank where the money was allegedly hidden The 52-year-old man was refused bail and will appear in court at a later date

Officers from the historical mining town pulled over the vehicle about 3:30am on Friday.

Police said the driver, 52-year-old West Australian James Whalley, appeared "nervous" — triggering a search of the car.

The officers allegedly found a methamphetamine pipe in Mr Whalley's luggage.

A further search found an extra fuel storage pod, with a capacity of 400 litres, which caused police to seize the vehicle and conduct a more intense search.

Police were suspicious about the contents of the fuel pod that was sitting in the tray of the vehicle, but was only three quarters full, Detective Inspector Michael Fuller said.

"[Police] had to take it to a local mechanic to decant the diesel fuel and that's when they were able to discover, cut into the fuel pod, a false bottom — the hidden container if you will — which contained the amounts of money," he said.

A steel box was located inside the tank allegedly containing $947,000 in cash sealed in Cryovac bags.

Mr Whalley was charged with dealing in proceeds of crime and goods in custody.

There was no prior warning about the contents of the fuel pod that sparked the police search, Detective Inspector Fuller said.

Speaking in Broken Hill Local Court on Friday, Mr Whalley's lawyer said the 52-year-old had asbestosis and might not get the care he needed in jail.

But the registrar said Mr Whalley had no ties to NSW and there was a risk he would not show up for court again.

He was refused bail and will appear in court again at a later date.