Police from Surry Hills Local Area Command are investigating the armed robbery of a hotel in inner Sydney last night.

Witnesses told police two men – one armed with a handgun, the other with a screwdriver – entered the building in Foveaux Street in Surry Hills about 11pm.

They threatened staff and demanded cash.

The men had been handed a sum of cash when police from Surry Hills arrived at the scene.

The men jumped into a black Audi and struck the parked police vehicle, forcing it out of the way before it was driven from the scene at high speed along Elizabeth Street.

Police secured the premises and circulated the area for the offenders.

A crime scene was established and officers from the Forensic Armed Robbery Unit examined the scene