SYDNEY (AFP) - Australian police uncovered a baby koala hidden in the bag of a woman they stopped in the street.

The 50-year-old, who was being spoken to on unrelated matters on Sunday (Nov 6) evening, stunned Brisbane officers when she revealed she had the creature in her canvas satchell.

"Not quite believing their ears, the officers cautiously unzipped the bag and found this gorgeous boy," Queensland police said.

"The koala - believed to be about six months of age - seemed to be in good health, although a bit dehydrated."

The woman claimed she found the joey, which is protected under the Nature Conservation Act, on Saturday (Nov 5) night and had been caring for it since.

The marsupial was handed to the RSPCA, an animal protection charity, which named him Alfred.

"He's been on fluids but is doing well and will shortly be going out to a carer," said RSPCA spokesperson Michael Beatty.

The woman was subsequently arrested over "outstanding matters", police said.

The much-loved koala has been under increasing threat across Australia in recent decades, particularly from habitat loss, disease, dog attacks and bushfires.

A 2012 national count placed total koala numbers at 330,000, though their tree-top habitat makes accurate assessment difficult.