New South Wales police said they had established a crime scene at the beach in the eastern Sydney suburb of Maroubra after the grisly discovery on Sunday morning.

"A number of children were playing at the southern end of South Beach when they located the body of a baby in the sand," police said in a statement.

"Investigations into the child's death are continuing, however, the age and sex of the child is yet to be determined."

Inspector Andrew Holland said the "very small infant child" was buried naked under about 30 centimetres (11.8 inches) of sand near the edge of some dunes, adding that the boys who found the body were just six and seven years old.

"The children were digging -- the child was buried under about 30 centimetres of sand," Holland told reporters.

"The two young children reported to their father who was nearby, who in turn contacted police.

"Unfortunately due to the decomposition, we can't tell (the age of the baby) at this point."

Investigators were also unable to immediately say how long the body had been there, he said.

Holland said investigators were looking through birth and hospital records as well as consulting with the Missing Persons Unit to try and find the child's parents.

A post-mortem would be carried out to determine how the baby died, police added.

Randwick Mayor Ted Seng said South Maroubra was one of the area's more isolated beaches, but that it was patrolled by council lifeguards and volunteer surf life-savers.

"To say that I'm shocked is an understatement," Seng added in a statement. "I cannot imagine the circumstances that lead to this tragic event."

Last Sunday, a newborn baby was found crying at the bottom of a roadside drain in Sydney by passing cyclists, with police saying he had been in the 2.5-metre (8.2-feet) deep drain since Tuesday.

The baby's mother remains in custody after she was charged with attempted murder, with the case returning to court on December 12.

AFP