Police arrested 45-year-old Miller and a second, 47-year-old man on Tuesday morning after finding methylamphetamine, or ice, concealed in eight candles in January.

Police say there was half a kilo of ice in each candle with the street value exceeding $2 million.

Police raided Miller's home at Rozelle, the other man's Balmain home and a business in Bankstown at dawn on Tuesday.

They found one kilo of heroin, worth $250,000. They also seized more than $75,000 cash, mobile phones, documents, encrypted electronic devices and smaller amounts of prohibited drugs.

Miller has now been charged with directing a criminal group. The other man has been charged with participating in a criminal group. Both are charged with supplying large commercial quantities of prohibited drugs.

"It's alleged (Miller is) the director of this particular syndicate ... Others, it will be alleged, are working under his instruction," Detective Superintendent John Watson said on Tuesday.

The men were distributing drugs from Sydney that were bound for regional NSW. The eight candles were destined for Albury.

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Police also seized a white Toyota Camry on Tuesday morning and will argue the syndicate used it to transport illegal drugs.

"This was not a small operation," Supt Watson said.

"They were well organised and well financed. They were well set up and they were intent on delivering death and misery right through the state and in this case, Albury."

The concealment of the ice was sophisticated, with the drugs hidden in glass mouldings inside the candles. The ice had "very high purity", Supt Watson said.

The two men have a longstanding relationship.

Police anticipate more arrests.

Miller won silver and bronze at the 1996 Atlanta Olympics and was briefly married to Sydney model Charlotte Dawson.

Both men were refused bail to appear at Newtown Local Court on Tuesday.

Australian Associated Press