NSW Police said in a report that emergency services were called to Freeman Street, Lalor Park, following reports of a house fire at about 1am local time on Sunday, Xinhua news agency reported.

Police said that the three children have not been formally identified yet.

A 29-year-old woman was taken to the hospital due to smoke inhalation and a 28-year-old man was arrested at the scene.

Further investigation into the incident is underway and results are awaited.