UPDATE 4:30pm – NSW Police have now confirmed the death is linked to this afternoon’s alleged knife attack in the Sydney CBD.

NSW Police have confirmed a woman has been found dead near the scene of this afternoon’s alleged knife attack in the Sydney CBD, however they are still investigating whether or not it is linked to the earlier incident.

Police officials issued a statement a short time ago stating that the woman’s body was discovered “inside a unit” on Clarence Street in Sydney at approximately 3:15pm this afternoon.

A short statement issued to media confirmed the discovery of the woman’s body, with police officials now looking into whether it is connected to the earlier alleged stabbing incident.

“Inquiries are underway after the body of a woman was found in side a unit on Clarence street Sydney about 3.15pm today.”

“Officers from Sydney City police area command are on the scene and will conduct inquiries into whether the incident is linked to an earlier stabbing at a hotel on the corner of Clarence and King St.”

One other woman was injured in the earlier incident. She was taken to hospital in a stable condition. The alleged attacker was subdued by members of the public before being taken into police custody shortly after 2pm.

Image: AAP