A man has been arrested over the death of Doonside man Cheyne Duncan, who was fatally stabbed in front of his children as he walked them home from school.

Detectives arrested a 21-year-old man in Blacktown on Thursday morning. Mr Duncan was stabbed in the chest with a machete in a brazen daylight attack on Wednesday afternoon.

The man is being questioned at Blacktown Police Station. No charges have been laid.

Witnesses said they heard children screaming at the time of the attack and originally thought they were being chased by dogs.