A teenage boy has been charged with a terrorism offence by police after he allegedly stabbed a bishop in Sydney's south-west on Monday night.

The 16-year-old allegedly stabbed Sydney bishop Mar Mari Emmanuel during a live-streamed service at Christ the Good Shepherd Church in Wakeley.

Bishop Mar Mari Emmanuel suffered lacerations to his head while 39-year-old Father Isaac Royel received cuts and a shoulder injury when he attempted to intervene.

The alleged offender was restrained by people inside the church and was later arrested by police.

He sustained a finger injury during the alleged stabbing and was taken to hospital. 

On Thursday, he was charged with committing a terrorist act.

The boy was interviewed by investigators from the Joint Counter Terrorism Team at a medical facility before he was charged.

The teen has been refused bail and is expected to appear before a bedside court hearing on Friday.

New South Wales Police Commissioner Karen Webb had declared the attack a "terrorist incident" early on Tuesday morning, in a move supported by ASIO.

A riot broke out outside the church shortly after the stabbing, where police said more than 50 officers were injured.

One officer suffered a broken jaw and another sustained facial and knee injuries during the unrest.

On Wednesday afternoon, police arrested and charged a 19-year-old man with riot, affray and destroy/damage property during public disorder. 

Strike Force Dribbs, which is investigating the incident, is expected to arrest more people in connection with the riot.

Bishop Emmanuel, who is recovering in hospital, said he forgives "whoever has done this act" on Thursday morning.

He relayed the message in an audio recording shared to social media.

"I will always pray for you. And whoever sent you to do this. I forgive them as well is Jesus's mighty name," he said.

In the almost four-minute speech, Bishop Emmanuel reassured his followers that his condition was improving.

"I'm doing fine, recovering very quickly. We thank the Lord Jesus, so there is no need to be worried or concerned," he said.

Father Daniel Kochou, who also spoke, said Father Isaac Royel, was "recovering well".

He added "nearby church members" who were attacked had also "received special care".