A number of mobile phones, documents police allege to be drug ledgers and about A$2,000 (£1,051) in cash was also recovered from a search of the hotel room.
Farrelly and McDaid were initially taken to Chatswood Police Station following their arrest.
The search of the hotel came three days after officers in the city’s north shore raided a short-term let unit on Hampden Road in the suburb of Artarmon, about 8km (4.9 miles) from the city centre.
About 2kg of a drug, also believed to be ketamine, scales, disposable gloves, clear resealable bags with white crystallised residue, and items of luggage were seized from the unit.
A spokesperson for New South Wales police said an investigation was ongoing.
The UK foreign office said: “We are supporting two British nationals detained in Australia and are in contact with the local authorities.”
