The All Blacks have discovered a listening device in a meeting room in their Sydney hotel ahead of Saturday's match against the Wallabies.

According to the New Zealand Herald, the world champions found a 'sophisticated' device on Monday after completing a sweep of the room.

It's reported that the device was discovered inside a chair, which appeared to have been cut open and then carefully sewn back together.

'We are taking this issue very seriously, and given it will be a police matter, it would not be prudent to go into further details,' said New Zealand Rugby CEO Steve Tew, in a statement on Saturday.

Australian Rugby Union CEO Bill Pulver told the New Zealand Herald that the allegation that the ARU was involved was 'ludicrous'.

'Mate, of course [the ARU is not involved],' he said, with The New South Wales Police Force having attending the hotel about the matter. 'I just think it's a ludicrous concept that there are listening devices being placed in team rooms. I don't know how that could happen.'

The paper added that the bug 'was a highly skilled and meticulous act and whoever put it there would have needed a significant amount of time to have pulled off such an accomplished job'.

Meanwhile, Superintendent Brad Hodder said police are forensically examining the device, but will also be seeking to find out what took the All Blacks six days to report the matter.

'That will be looked at within our investigation, and that will all be taken into consideration,' Supt Hodder said.

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