The International T1 and Domestic T2 terminals are affected, with reports that the glitch was caused by cameras in the security area of the terminal. The T3 Qantas domestic terminal isn't affected.
Sydney Airport said it had started processing customers again at 7.45am, but the backlog is expected to take hours to clear.
Meanwhile, customers started sharing photos on social media of the surging crowds,
Virgin Australia tweeted earlier that passengers have started being processed but 'at a reduced capacity'.
'Due to a technical issue at Sydney Airport’s domestic and international terminals, guests are being processed through security at a reduced capacity,' the airline said.
Customers who are travelling today and being advised to contact their airline, but still proceed to the airport as normal.