In a video of the incident shared to social media, Thorpe can be seen lying on her back in front of a truck that was part of the NSW Police float on Saturday night.
Two officers approached Thorpe before the senator got to her feet.
Thorpe could then be seen talking with police and Mardi Gras crew.
“About 9pm a woman laid in front of a float on Oxford St, momentarily preventing the progress of the parade,” NSW Police told 9News on Sunday.
“She was later removed from the parade at the request of organisers for breaching the terms of her participation.”
Thorpe was a part of the “No Pride in Genocide” float, which was organised by Pride in Protest.
“Black and brown trans women started the first pride march as a protest against police violence,” Thorpe said.
“Today, we still face violence from police.
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“It’s unfortunate that I am the first but this is a celebration of modern Australia, we’re a diverse and inclusive Australia and that’s a good thing,” Albanese said on the ABC telecast.
“We need to be a country that respects everyone for who they are.”
This year’s parade comes as Sydney hosts WorldPride 2023, the first time the event has been held in the southern hemisphere.
NSW Police Assistant Commissioner Anthony Cooke said the crowd was well-behaved, and police were pleased with the behaviour of majority of revellers.
However, one police officer suffered a suspected broken nose during an arrest in Oxford Street while a second officer suffered grazes and a black eye after being assaulted while travelling to Moore Park.
Police arrested four people for offences including the assault police.
Sydney Mardi Gras 45th anniversary parade