The motorway was closed between Mascot and Beverly Hills for more than two hours, with motorists advised to avoid the area or catch the train. Westbound lanes reopened at about 6.15pm, with eastbound lanes opening shortly afterwards.

The outage began just before 4pm, Ausgrid said, leaving 60,000 homes and businesses without power and necessitating the closure of major roads.

Cars were diverted from the M5 at General Holmes Drive and King Georges Road, instead directed through General Holmes Drive, Bestic Street, West Botany Street, Forest Road, Stoney Creek Road and King Georges Road.

Even with lanes re-opened, traffic in the area was described as "extremely heavy", with buses delayed up to 40 minutes in the inner west and south west. The delays came as thousands of people were expected to head into the city for the opening night of the Vivid festival.

Sydney Airport advised travellers to take the train to and from the airport as the M5 delays continued.

When the outage began, up to 100 sets of traffic lights were blacked out in areas including Croydon Park, Canterbury, Bexley, Bexley North, Roselands, Kingsgrove, Wolli Creek, Mascot and Burwood Heights. Just after 6pm, around 50 sets of traffic lights remained without power.

Police were tasked to direct traffic at major intersections, with motorists advised to "exercise extreme caution and allow plenty of additional travel time".

One man said he had had driven for 25 minutes without seeing one set of traffic lights that were illuminated. Another commuter described the situation as "pandemonium in the inner west", with traffic lights out from Ashfield to Lewisham.

Those planning to catch the light rail also faced delays, with services replaced by buses between Dulwich Hill and Lilyfield as part of the same power outage. Services returned as normal at about 6.30pm.

Trains, however, were unaffected, Sydney Trains said. All services were running "on or close to time".

In a statement, Ausgrid apologised for the disruption and said crews restored power to all 60,000 homes and businesses, including the M5 tunnel, by 6.20pm.

Suburbs affected had included parts of Ashbury, Ashfield, Belfield, Burwood Heights, Campsie, Earlwood, Dulwich Hill and Strathfield South.

"Supply was interrupted just before 4pm after a fault on a piece of equipment inside our Canterbury substation. Crews are still on site investigating this evening," an Ausgrid spokesman said.

"We'd like to thank customers and motorists for their patience this afternoon."

The news would be welcome for customers at the Summer Hill Hotel, who were facing the prospect of warm beer if the power did not return soon.