Police are appealing for a witness to come forward after an alleged armed robbery at a service station near Newcastle on the weekend.

About 11.30am on Saturday 2 April 2016, a woman entered a service station on the corner of York Street and Anzac Parade, Teralba, allegedly armed with a knife and demanded money.

The 55-year-old male employee complied and handed over a sum of cash.

The woman fled the scene.

Officers from Lake Macquarie were notified and attended the location, and a short time later, a 42-year-old woman was arrested at a unit on Anzac Parade, Teralba.

Police believe when the woman fled the scene, she was approached by two males.

It will be alleged the woman produced a knife and threatened the men.

Police would like to speak to a man who might be able to assist with ongoing inquiries. The man is described as being aged in his 30-40s, with a black bushy beard, dark hair and was last seen driving a white four wheel drive.