A crane continues to hang precariously from the 51st floor of the highest tower at Barangaroo in Sydney's CBD, after it was damaged while lowering machinery on Tuesday afternoon.

An exclusion zone is still on force at the bottom of Tower One at the northern end of the building project, but there were no reports of injuries in the incident which occurred at about 2pm.

The 3.9-tonne spider boom crane involved in the incident was bolted onto the top of Tower One, and was lowering a so-called boom lift at the time.

Police have closed Hickson Road and Sussex Street to traffic and pedestrians between Erskine Street and Towns Place.