The incident happened in the food court of Terminal 2 when a man allegedly tried to grab a firearm from an Australian Federal Police officer.
Alarmed witnesses told media outlets that the man was quickly wrestled to the ground by two officers but the gun went off during the struggle.
No-one was injured during the drama and the man, who has not been identified, has been arrested.
A witness told Radio 2GB they were in a coffee shop when the gun went off, describing the ‘loud’ noise.
“Everyone hit the deck… I think it was a police gun. I think it was fired during the initial struggle,” the witness said.
“We heard the bang at about 6am and didn’t know what it was at first. But when we realised it was a gunshot, it gave us a big fright – I was very frightened,’ a worker told the Daily Mail.
“The AFP can confirm a man has been arrested at Sydney Airport this morning after a police firearm was discharged inside the terminal,” a spokesperson said.
“An investigation into the incident has been launched and a crime scene has been established.
“There were no injuries as a result of the incident and there is no ongoing threat to the public.”
The AFP has set up a crime scene and an investigation is underway.