Witnesses reported seeing the train come to a halt near the corner of Pitt and Park Streets shortly before 6pm.
Passers-by said the stalled carriages were later pulled into the nearest station, and a police spokesman said everyone had been removed safely, with no injuries reported.
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When contacted by SBS, a spokeswoman for monorail operators Veolia Transport refused to comment on the breakdown.
Sydney's monorail travels in a circuit around the city centre, with stations at Darling Harbour, Chinatown and in the CBD.
The 3.6km loop track was opened in 1988.

