Breaking: Two people arrested after fake gun incident in Sydney's east

Two people have been arrested after an incident at the Entertainment Quarter in Moore Park on Monday evening. (ABC News: Floss Adams)

Two people are in custody following an incident involving a fake gun at Sydney's Moore Park on Monday evening.

The police operation unfolded at the Entertainment Quarter, with officers swarming the area following reports a person had a firearm.

NSW Police said two people had been taken into custody and there was no ongoing threat to public safety.

Officers also confirmed the gun involved was fake.

The public has been urged to avoid the area during the ongoing operation.