Well-wishers turned out in their thousands to catch a glimpse of the Prince, who looked dapper in a navy suit and a blue patterned tie.
The Queen's grandson was sure to talk to the younger members of the crowd, as well as their parents, making funny faces to keep them entertained.
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One young boy presented Harry with a toy koala, who joined them for a photograph.
Earlier in the day Harry boarded the Australian navy's HMAS Leeuwin to review the ships with Governor-General Quentin Byrce, who represents Australia's head of state, Queen Elizabeth II.
The 29-year-old was smartly dressed in a white military uniform and beret as he helped to celebrate Australia's naval centenary which has drawn in warships from around the world.
Vessels have arrived in Sydney from the US, China, Britain, Brunei, Micronesia, France, India, Indonesia, Japan, Malaysia, New Zealand, Nigeria, Papua New Guinea, Singapore, Spain, Thailand and Tonga for the spectacle that expected around 1.4 million attendees.