Drug lab uncovered in a Melbourne hotel

A drug lab has been uncovered inside a five-star Melbourne hotel.

The Olsen hotel, on Chapel Street in South Yarra, was raided by police early on Friday.

Equipment capable of producing the drug ice was allegedly found inside one of the rooms.

A woman, aged in her 20s and who had been staying at the hotel, was arrested.

"She is still assisting with enquiries," a Victoria Police spokesman said late on Friday.