The NSW Premier has admitted he's 'embarrassed' after an inmate was wrongly released from jail just hours after he was sentenced. 

Kyle Quayle, who is currently serving a 12-month sentence for stealing and assault offences, was freed from Clarence Correctional Centre on Tuesday.

It's understood Quayle was released on the same day he was sentenced for the offences after a 'clerical' error was made by Newcastle Local Court, with the error only realised the following morning.

The 35-year-old was found in Hamilton North in the Newcastle area on Thursday afternoon, some 450km south of where he was released.

He was arrested and taken to Newcastle Police Station where he was charged on an outstanding arrest warrant. 

Premier Chris Minns described the incident as 'embarrassing.'

'I'm sorry it happened, really - it's embarrassing,' he told reporters outside the Sydney Opera House on Thursday.

'In 2026, with the biometric and identification tools available, it shouldn't happen. I want to make sure it doesn't happen again.'

It's understood Newcastle Local Court had sent over an intensive corrections order over to the prison, rather than notice of his 12-month custodial sentence.

A spokesperson from prisoner operator Serco told the Daily Mail: 'Staff at Clarence Correctional Centre released an inmate according to the court information available to them.'

Quayle fronted Bail Division Local Court 2 today where it appeared he was quite confused as to whether he should be released from jail entirely.

'Is this double jeapordy? What about me? I was given my freedom,' Quayle told the court.

The judge then addressed Quayle and explained he'd be sent back into custody: 'It's not double jeopardy, it appears to be an unfortunate clerical error.'

The judge also said Quayle was released through no fault of his own.

Quayle could be released as early as September 22. 

The incident echoes a similar scenario in 2023 when a paperwork blunder saw a convicted criminal mistakenly released from prison five months early.

Randolph Harrison Convery, 49, who was in prison for domestic violence offences, was released from the Newcastle Court House in August 2023.

Convery reportedly even told officers that he was not meant to be freed. He was arrested at a country club at Port Stephens more than a week after his accidental release.