The man, believed to be the wanted Dubbo man who fled Mannus prison farm east of Wagga last Thursday, was arrested in the Sydney suburb of Waterloo yesterday after a massive police hunt.

It will be alleged that about 4.50am last Saturday, residents of a home in Cullen Road in Wagga were woken by the screams of a young girl.

A male neighbour allegedly saw the girl being carried by a man and gave chase.

The girl was released in Cullen Road and a man was then seen running north.

He was chased by the neighbour but escaped and was last seen in a vehicle heading towards his home town of Dubbo.

An extensive state-wide search had been conducted to locate the man wanted for questioning in relation to the alleged incident.

Police said that about 1.50pm yesterday, a 20-year-old man was arrested in Pitt Street at Waterloo. He was taken to Surry Hills Police Station and interviewed.

Reported sightings of the man near Dubbo, and police fears that he was holed up in an abandoned farmouse near the city, sparked warnings by police for residents to act with caution and lock all doors.

He was allegedly seen walking east along the railway 12 km west of Dubbo on Sunday.

On Wednesday police said he may be on his way to Sydney.

Police believe he was involved in a crime spree across western NSW involving the theft of three vehicles including a Mitsubishi Triton.