A group of men wearing all black, including balaclavas, have sparked a police operation in North Sydney.

A train travelling into Sydney abruptly terminated at North Sydney Station due to the operation.

A number of men wearing all black were inside one of the carriages.

They produced a banner referencing a Neo-Nazi group.

The operation led to Sydney buses diverting services to the Pacific Highway, missing up to two stops.

The police operation began at 11:30am this morning and ended just after 4pm.

NSW Police said there were no injuries and there was no threat to public safety.

Witness Jase Kerr said police terminated a train at North Sydney Station.

He said the carriage was half-full of men wearing all black.

"From what I could see, it looked as though the carriage was half full of them, when I saw them," he said.

"You could see police questioning them… Police were shepherding you away from that area, they were saying to you 'get out of here'.

"I was cautious, there was a bit of fear there."

The group of men later convened at nearby St Peters Park, where they were met by police.

In a statement, Premier Chris Minns condemned the actions of the men.

“Normal people don’t celebrate Australia Day with a balaclava on," he said.

"Due to great police work millions of Aussies were able to celebrate and come together without a potentially ugly confrontation.

"There is absolutely no tolerance for this behaviour."