A man who reportedly threatened another man with a gun during a siege in the inner Sydney suburb of Surry Hills has been charged.

About 4.30 pm (AEDT) on Wednesday armed police in helmets and bulletproof vests and negotiators were called to a housing commission block on the corner of Devonshire Street and Clisdell Street where it was feared a man was holed up with a gun, police say.

The surrounding area was cordoned off and the man was eventually arrested about 6pm.

He was taken to The Rocks police station and charged with common assault.

Investigations are continuing and further charges may be laid.

Conditional bail was granted and he's due before Downing Centre Local Court on April 18.