The systems were down from about 5.20am Monday, as thousands of passengers converged on the airport at the start of school holidays.

It took about three hours to resolve the problem involving radar and communications which caused flight delays and cancellations around Australia.

An Airservices Australia spokeswoman said the "technical issues" which plagued Sydney Airport had been resolved but flights would be delayed throughout the day. 

The government body, which manages airspace across the country, was still able to "manage air traffic safely", she said.

"The issued has been addressed but the airport is not at normal capacity," she said. "We are working hard to clear the backlog of flights."

There were chaotic scenes at Sydney Airport earlier in the morning as passengers on all airlines were told they would not be able to depart.

Passengers at Sydney were advised to board their planes but then had to wait on the tarmac. A number of flights were cancelled. 

Arrivals were also affected with airline staff saying only 15 planes could land per hour. Under normal circumstances, a maximum of 80 aircraft arrivals and departures per operational hour is allowed.

It is believed the problem related to the flight planning system which feeds into the radar picture. Without it, air traffic controllers cannot distinguish which plane is which.

A Sydney Airport spokeswoman said passengers should check with their airline to see if their flight is affected.

A Melbourne Airport spokesman confirmed that some flights were held back due to the outage at Sydney airport.

Passengers on a Virgin flight waiting to depart Sydney were told that the outage had affected email communication as well as the radar. The plane's captain told passengers flight plans were being submitted by fax before being processed manually by air traffic control staff.

Grounded passengers took to social media to express their frustration with the lack of information being provided about flights.

The Sydney problem will have major knock-on effects for the whole country throughout the day.

"If one airport sneezes the others will catch the cold because we're all interconnected," a Brisbane Airport Corporation spokeswoman said.

She said knock-on delays were already being felt in Brisbane from the Sydney event.

"A lot of flights will be impacted because it is one of the busiest routes to and from Brisbane."

Melbourne Airport also confirmed likely delays throughout the day.

- With AAP