Two men have been charged after hundreds of weapons - believed to be for sale from businesses in Sydney's Haymarket - were seized.
The haul comes as part of an ongoing investigation following an affray earlier this year.
In March, officers established Strike Force Dudi after a number of men were charged over a brawl involving machetes and axes in Sydney's inner city suburb of Waterloo.
Acting Superintendent Phil Hallinan said police identified the weapons as being sourced from two businesses in Haymarket.
The two shops had been "unlawfully supplying knives to members of the community" he told reporters on Friday.
"We obtained evidence that they within a 12 month period supplied weapons without permits," Supt Hallinan added.
"I can advise that neither person had a permit to supply those weapons."
One of the stalls had been operating in the city's central marketplace Paddy's Market for more than a decade.
"The stall is entitled to supply certain types of knives, the concern with this one is they can't supply prohibited weapons," Supt Hallinan said.
On Thursday, businesses in Haymarket and homes in Westmead and Cherrybrook were searched.
Police found more than 300 prohibited weapons, including flick knives, sheath knives, butterfly knives, zombie knives, push daggers and concealed blades.
Two men, aged 45 and 60, were arrested and have been charged with possessing or using a prohibited weapon without a permit and with selling and dealing with prohibited weapons.
Both were bail refused to appear at Downing Centre Local Court on Friday.
The two men were not known to each other, police said.
In response to knife crime concerns, police in NSW could soon have the power to randomly scan people for weapons at transport hubs, shopping centres and other public places.
The laws, which are yet to pass parliament, will allow officers to use metal-detecting wands without a warrant and have been pushed forward after a recent spate of high-profile stabbings.
The legislation will be similar to powers already in place in Queensland that were named after teenager Jack Beasley, who was stabbed to death on the Gold Coast in 2019.
The changes will also make it illegal to sell knives to anyone under 18, with exemptions for those who need the implements for work or study.
The shift comes despite official figures showing knife-related offences, including assaults and robberies, consistently trending down in the state over the past two decades.
