Australian police foiled an alleged organised crime hit by a so-called kill team near a Sydney daycare facility, authorities said on Wednesday.

New South Wales police swooped in on two cars after learning three men were preparing to carry out the alleged killing in Revesby, a suburb in the city's southwest, on Tuesday.

Police stopped two cars and arrested the men, finding two firearms, balaclavas, bodyworn cameras and jerrycans containing fuel during a search.

A third firearm was located during subsequent searches of vehicles and premises allegedly linked to the men.

Footage from Tuesday showed the two cars wedged between police vehicles as authorities moved in on the alleged offenders brandishing firearms. The cars' windscreens were pocked with bullet holes.

Police Assistant Commissioner Scott Cook said authorities had been investigating a transnational crime network "believed to be involved in multiple conspiracies to murder" for several weeks.

The police allege the victim was targeted due to a breakdown in relationships within the syndicate, he said. The trio of men reportedly did not know the victim and, Cook said, came "pretty close" to carrying out the hit.

He expressed shock that the group was "prepared to kill" in an area where there was such a high risk of collateral damage.

Cook also stressed there was no chance the trio would have been "allowed to make it to a centre".

The men have been charged with a string of offences, including conspiracy to commit murder and participating in a criminal group. They were refused bail and appeared in court on Wednesday.

The Sydney Morning Herald newspaper reported a Vietnamese criminal syndicate hired them and paid for a hit on the victim who was previously linked to the network.

Sydney police have in recent months stepped up efforts to curb criminal activity linked to Vietnamese groups after a string of violence.

In April, a Sydney mother was abducted and executed over her husband's alleged connections to a Vietnamese-linked organised crime network. Her children were also wounded.

In another case, a man was shot in the head and buried alive. He dug out and stumbled into a service station to ask for aid. (AFP)