The 23-year-old was attending a social function as part of the ABC show's cast members at a Sydney hotel yesterday, when a man asked her to pose for a photograph, reported Ace Showbiz.
According to the eyewitness Hyland pushed the man away and screamed, "Don't touch me there!", before her security guards intervened.
According to the New South Wales state police the 29-year-old man was arrested yesterday in relation to the incident.
"It is alleged that the man indecently assaulted the 23-year-old woman at about 7:50 pm," a spokesperson for the police department said.
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"Sorry to all the fans that I didn't get to say hi to but I had to leave due to an inappropriate touch of a fan."
Her boyfriend Matt Prokop also tweeted his support to Hyland.
"To the person who assaulted Sarah tonight I hope to God you don't see next week. All Sarah wanted to do tonight was say hi to the girls who were waiting outside. Sorry for the 'offensive' tweet. But in the states we respect women," he tweeted.