Michael Striker, 48, who killed a man in Sydney in 2002, was found at a hotel in Parramatta on Wednesday.

He had been receiving psychiatric treatment at Bloomfield Hospital.

Mr Striker was last seen leaving a Peisley Street shop about 10.30am on Monday.

He was later seen in the Bathurst area.

Police said they were notified about 2pm on Monday after the man failed to return to Bloomfield.

"Following enquiries and a public appeal, police received information the man was at a hotel on Anderson Street, Parramatta, about 11am today (Wednesday)," a police statement said.

"Officers from Parramatta Police Area Command arrested the man who is expected to be returned to a facility."

A Western NSW Local Health District spokeswoman said they could not comment on the incident.

"NSW Health cannot discuss the specific circumstances for a patient who has appeared before the Mental Health Review Tribunal due to the requirements under the Mental Health Act 2007," she said.

On June 3, 2002, Mr Striker, who was known at the time as Michael Sorell, killed a man outside an electronics store in Sydney.

In 2003 Mr Striker was found not guilty of murder by reason of mental illness.