Police were called to the Winz office about 3.45pm yesterday after a member of the public saw the man with a craft knife, Southern District Command Centre deployment co-ordinator Senior Sergeant Matt Scoles said.
"A male who was waiting in the waiting area [was seen to] pull a craft knife out of his pocket and open a package," Mr Scoles said.
"[Winz] staff then confronted him and during that confrontation the male has passed that craft knife on to a female associate of his."
The man was arrested and trespassed from the building, but charges had not yet been laid.
"It doesn't appear ... that there was anything sinister in his intentions," Mr Scoles said.
"But that's something that will be considered during the inquiry."
The man could face charges but inquiries were ongoing, he said.
A spokeswoman for Winz said the incident was being handled by police.
The site remained open after the incident, she said.
Mr Scoles said police had not been able to find the female associate.
"No weapons of any sort will be tolerated in the offices of any government departments," he said.
