The drama unfolded in Fairfield this afternoon on a day of wild weather as the state was being hit by severe thunderstorms.
About 11 residents of a nursing had to be moved to a safer area and 20 people were evacuated from a nearby unit block.
Dramatic images show the crane looking as if it had completely collapsed in the middle, the top half drooping down to face towards the ground.
There were major delays on train lines, with services not running between Granville and Canley Vale.
An engineer was on site assessing the damage.
It’s believed two more cranes will be brought in to remove the damaged part of the crane.
Storms will continue to lash the state overnight, stretching from Goulburn to the Queensland border.