Emergency services were called to a unit block on Richmond Avenue in Auburn just after 7.30pm.
Paramedics treated a man at the block,but he died at the scene.
Officers from Auburn Police Area Command arrested a 32-year-old man a short time later on South Parade,near Auburn station,about five minutes’ drive away from the unit block.
The man was taken to Auburn police station,where he is assisting officers with their inquiries.
Police believe the men were known to each other and investigators have established a crime scene at the unit complex on Richmond Avenue,which is close to Auburn West Public School.
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