A NSW police officer will need surgery to remove a bullet fragment from his arm after a major incident in Sydney's inner west.

Officers were carrying out routine patrols, as part of an operation targeting anti-social behaviour, when they noticed a vehicle parked at a reserve on Bayview Terrace at Earlwood, just before 11pm on Friday.

The four officers approached the sedan from behind before it will be alleged the driver reversed the vehicle, ramming into one of the officers.

An officer fired one round from his firearm, a fragment of which struck another police officer on the forearm.

Paramedics treated him at the scene before he was taken to the Royal Prince Alfred Hospital where he will undergo surgery to remove the fragment.

The 26-year-old drive and his female passenger are assisting police with their inquiries.

A crime scene has been established and investigations are ongoing.

Originally published as Police officer in hospital after being shot