A lost baby penguin is recovering well after it was found and rescued by two local men in Sydney, Australia.

Local media reported that Josh Prini and Scott Martin happened on the out-of-place bird while taking photos of local street art on Thursday.

The young men heard strange noises coming from the inner-city storm drain and decided to investigate.

Much to their surprise they found a little penguin struggling to get free.

Prini and Martin tried to help the bird when a sudden gush of water flushed the penguin out.

It then proceeded to take a three-hour waddle down the canal closely followed by Prini and Martin.

Eventually it got tired and they were able to catch it in a tote bag.

Prini and Martin contacted the RSPCA, which didn’t believe them at first, but eventually came to pick up the bird.

The penguin was taken to Taronga Zoo where it was found to be healthy although a little underweight.

An RSPCA spokeswoman told local media this was a very rare occurrence.

"There is a colony near Manly - that's where we think he's come from," the spokeswoman said.

She added that the bird will be returned to the wild soon to be reunited with its family.