Police say they were called to Bondi Junction on Saturday night following reports a man had been stabbed several times.
Officers were told two men - one in his 50s and the other believed in his 30s, were involved in an altercation at a fast-food outlet before they were both wounded.
The older man died at the scene.
The younger man was arrested and taken to St Vincent's Hospital under police guard where he's in a stable condition following surgery.
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