Police said the man appeared briefly through a window after issueing several demands but declined to reveal details

Australian police have surrounded a family courthouse in Sydney after a man claiming to have a bomb in his backpack took an 11-year-old girl, believed to be his daughter, hostage, local media reports said.

Television networks showed police had blocked a main street outside what they identified as a family court building in the west of the city, with a fire engine also parked outside.

Australian broadcasters showed footage of the man looking from a second-floor window where he had smashed a hole in the office window with a glass bottle. 

Police said they could not give any details on the situation, but confirmed parts of a main street in Parramatta, a suburb about 20km from central Sydney, had been cordoned off.

The girl appeared to be well, and police spent several hours trying to negotiate with the man, Police Assistant Commissioner Denis Clifford said.

"We don't believe there's any specific threat against the girl, but obviously we'd like to secure her release," he said.

"The concern is that she's in a situation where we've got somebody with a backpack, we don't know exactly what's in that backpack so we have to assume that what he's saying is true."

The identities of the man and child were not immediately disclosed.

Police said the man issued several demands but declined to reveal details, and said they had not yet established his motive.

Officers evacuated the building, kept onlookers 100 metres away and were seen entering with at least one automatic weapon. Witnesses said other buildings were also evacuated.

"We're working through those demands with him and we're doing the best we can to secure a peaceful resolution," Clifford told journalists.

"The fact that he's there and he's made certain threats is obviously of concern to us."

Five ambulances and two fire engines were standing by at the scene. Clifford said he did not believe that the standoff had anything to do with the family court that adjoins the building.