The children allegedly became involved in an altercation on Tuesday afternoon at Claremont Meadows Public School.
Police said it was alleged the 11-year-old boy left the school and then returned with a knife and confronted the other student, aged 12, outside the school grounds.
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He managed to alert a teacher, who disarmed the boy.
No one was injured, police said.
The 11-year-old boy was charged with being armed with intent to commit an indictable offence and common assault, police said.
He was granted conditional bail and will face Parramatta Children's Court on March 10.
The incident came a day after a schoolyard stabbing in Brisbane, in which 12-year-old student Elliot Fletcher died.
A 13-year-old boy has since been charged with murder.
