A man armed with a large knife has been arrested in Sydney after allegedly stabbing a woman, reports ABC.

The victim was injured in the incident and has been taken to Sydney's St Vincent's hospital in a stable condition, the report added.

Australian police and NSW ambulance paramedics found the woman inside the Hotel CBD, on the corner of King and Clarence streets, with a stab wound.

Video taken at the scene shows passers-by using chairs, a crowbar and a milk crate to apprehend the offender before he was arrested by authorities.

One witness told the ABC he was walking towards Wynyard Park when a man came running around the corner "with a long knife".

Video shows the man jumping onto a car roof in the middle of the street before being restrained by members of the public with milk crates and chairs.

"[He was] about three or four metres away from me, and then came about five or six other men chasing him," the witness said.

"They were armed with crowbars and one man had an axe and another man … I think had a firefighting implement.

"My immediate impression was that it was a scene from a crime show being shot, but then that quickly turned out not to be the case and the man ran down the road towards the cafe where patrons there must have tripped him up and they then put a milk crate over his head."

When the man fell he dropped a knife into the gutter.

"There was a fair bit of force being applied to him at the time," the witness said.

The man has since been taken to Sydney's Day Street Police Station.