Stanley Hou, a 35-year-old man from Lyneham, was arrested after the laboratory was uncovered by ACT Police and WorkSafe on Tuesday, just off Sheppard Street in Hume.

ACT Chief Police Officer Rudi Lammers said officers found within the building 2.5 tonnes of chemicals and equipment that could be used to produce drugs.

"We found out that the chemicals inside the drums could have been used to produce ecstasy and the methamphetamine MDMA," he told ABC radio.

"We haven't worked out just how much it could produce but I image the street value would be many, many millions of dollars."

Chief Police Officer Lammers said the discovery of the drug lab and the arrest of Mr Hou was directly linked to Taskforce Nemesis, which is dedicated to investigating outlaw motorcycle links and organised crime in the ACT.

"It is significant that Taskforce Nemesis detectives are the people who executed the warrant on the place in Hume and later arrested and charged the man from Lyneham," he said.

Mr Hou faced court on Wednesday morning charged with one count of manufacturing a large quantity of controlled precursors and for the manufacture and sale of drugs.

Wearing a collared shirt and jumper, he did not apply for bail when he appeared in the ACT Magistrates Court and did not speak during his brief appearance.

He will remain behind bars until he next faces court on Monday, when his defence lawyer Kamy Saeedi indicated he would apply for bail.

Mr Hou waved to two supporters in the back of the court as police led him from the courtroom.

Extensive road closures were put in place around the laboratory and businesses were evacuated while police and hazardous materials teams assessed the scene.

Chief Police Officer Lammers said the road closures and the establishment of an exclusion zone had been a necessary precaution.

"Our experience with clan-labs in different states and territories in Australia is that they are very volatile and very dangerous," he said.

"Given the scale and amount of chemicals inside, the potential for danger in the area was quite significant."

The area was locked down over Tuesday night.

The drug bust came after a six month investigation into reports of hazardous material and fumes being released into the air near the Hume location.

ACT WorkSafe commissioner Mark McCabe said the source of the fumes had been unknown until the investigation reached a head in recent days.

"That investigation culminated in a visit to a property [on Tuesday] that was suspected to be the source of the hazardous material," he said. "Worksafe attended the location with AFP and some material was discovered on site."

The drug laboratory appeared to be located in a warehouse off the main road, rather than in one of the buildings facing onto Sheppard Street.

Once authorities were alerted to the discovery, ACT Policing established two road closures at either end of Sheppard Street and on the Monaro Highway, with traffic being turned back by officers in both directions.

As well as police, members of ACT Fire and Rescue and a Hazmat team also attended the scene.

The operation caused traffic chaos on Monaro Highway during the afternoon, with police blockades leaving bumper to bumper traffic in both directions early on Tuesday afternoon.

While Monaro Highway was reopened for traffic about 4.10pm, Sheppard Street in Hume remained closed until about 6pm, with some workers and residents unable to return due to the road closures.

One Hume resident said she had been allowed to return to her home about 6.15pm, after Sheppard Street was reopened.

"I was just saying to my partner it's a good thing we decided to move because it's not really the sort of thing we wanted to have here," she said.

"That being said, it's an industrial zone. I reckon if you want to have a good place empty after hours and on weekends then it's a good place to be."

Tianna Kuncic, who was at her gym on Sheppard Street on Tuesday afternoon when the bust occurred, said she noticed a lot of police activity on the street.

"There were two very big trucks, which looked like orange drug-testing buses, and heaps of people pulling up outside my gym," she said. "Then a guy walked out from his business and said there'd been a drug lab found."