Two families have been left traumatised after their children were mixed up at a Sydney childcare centre, with one baby sent home with the wrong family for hours.

On Monday, a mother went to collect her child from First Steps learning centre in Bagor only to be told that her one-year-old had "already been taken" by a man hours earlier.

After reviewing security footage, it was discovered that a grandfather of another baby was given the wrong child.

He didn't realise and was equally disturbed by the mishap.

Former First Steps employee Annabelle Murray told 9News the incident "was catastrophic and could have been so much worse".

"That's what scares the life out of me, is you had no idea who that man was," Murray said.

"He could have been anybody. It's just so lucky that he brought the

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