A man has been arrested after Parliament House in Sydney was evacuated following the discovery of what police say was a suspicious item nearby.

Officers were called to Hospital Road at the back of the Macquarie Street complex about 10:00am and people inside Parliament House were told to move to the side of The Domain, several hundred metres away.

Workers were told the police operation was over and they were allowed to go back into the building about half an hour later.

An announcement broadcast over loudspeakers said there had been a security incident on the concourse between Parliament House and the State Library.

Police later arrested a man outside the Parliament building.

The ABC understands officers used CCTV footage to identify the man who allegedly left the suspicious item and arrested him near the entrance to Parliament.

A NSW Police spokeswoman said the man was taken to Day Street police station where he was assisting police with their inquiries.

Police said the suspicious item was located and determined to be safe but officers continue to be on the scene conducting an investigation into the incident.