Police say two men are in custody after counterterrorism raids in Sydney.

A police official, who spoke on the police service's usual condition of anonymity, said on Wednesday the arrests were made in the Sydney suburb of Fairfield on Tuesday. She would give no other details.

She would not comment on media reports that police seized a hunting knife, flag and other items.

She said senior New South Wales state and federal police will hold a news conference on the arrest later Wednesday.