A major operation unfolded near Sutton Road in NSW, holding up early morning traffic, after a dramatic police chase along the Federal Highway.

At 4.45pm, Canberra police confirmed the manhunt had since spilled across the border - their NSW counterparts are now searching the Mulligans Flat area for two suspects.

It is unclear if either of them are armed but police have been taking heavy precautions.

A NSW Police spokeswoman said the chase had begun when officers tried to stop two cars travelling on the Hume Highway "due to the manner of driving".

Both fled but road spikes stopped one of the cars - a Toyota Camry - on the Hume near the Federal Highway. A man and a woman were arrested and taken to Goulburn Police Station.

But the second car - a Suburu sedan - sped off. Police called off the chase as it became more dangerous, and a short time later deployed road spikes at the Sutton Road overpass.

The car came to a stop just before Eaglehawk. Its occupants - believed to be a man and a woman - fled on foot before police could arrive.

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Officers set up a perimeter and donned tactical gear to begin a manhunt through nearby bushland, while the abandoned car caused traffic headaches for much of the morning.

The suspects remain on the run but the search along the highway has since ended.

Canberra police are assisting their counterparts from NSW, now doorknocking Mulligans Flat homes.

As for the first pair caught in the chase, a NSW Police spokeswoman said the man had been released pending further inquiries and the woman was expected to be charged.

Locals have descended on Sydney this weekend to see if the Canberra Raiders can break their 25 year premiership drought.

The police operation caused delays - but some roadside entertainment too as people slowed down to watch officers search the scrub. The abandoned car was cleared from the road by 8.45am.

More to come