Inquiries are underway after a hotel in Chippendale was robbed this morning by a man armed with a handgun.

Police were called to the hotel on City Road, Broadway, shortly before 3.50am (Sunday 29 October 2017), responding to reports an armed man had entered the building and threatened staff.

The man was handed a bag containing cash and fled the scene before police arrived.

A female employee was assaulted by the man during the robbery; she has been treated for minor head injuries before being taken to Royal Prince Alfred Hospital as a precaution.

Police from Redfern Local Area Command are now searching for a man seen leaving in a small dark hatchback; a vehicle matching that description has been found burnt-out in Leichhardt a short time ago.