Harry arrived on Friday evening and headed straight to his hotel ahead of his engagement on Saturday.
The 29-year-old is due to attend the International Fleet Review to mark Australia's naval centenary and earlier in the day a helicopter promoting the event flew over the city's iconic opera house and harbour bridge.
Harry has been invited to the gala by the Chief of Navy and will travel as a guest of the Australian government, which includes the country's new Prime Minister, Tony Abbot.
The New South Wales' press have reported that Harry will board a boat at Campbell's Cove and travel across to Kirribilli House around 4pm local time for an official function with the Prime Minister.
Mr Abbot's two daughters, Bridget and Frances, are also said to be joining their father and the Prince for a private event.
A helicopter in Sydney advertising the International Fleet Review
Australian fans of the Prince took to Twitter to express their excitement about their royal visitor and also noted that there is another famous Harry in town.
One Direction singer Harry Styles is also in Australia and was spotted meeting fans in Melbourne on Friday.