An attempt to smuggle seven million cigarettes into Australia in a shipping container supposedly carrying potato chips and tea has been foiled by Customs officers in Sydney.

The officers found the cigarettes during a search at the Port Botany terminal, hidden beneath three rows of potato chips.

The container had arrived from Dubai on October 19.

A 46-year-old man was arrested after Customs investigators followed the container to a storage facility at Wentworthville, in Sydney's west, and allegedly found him unloading the goods.

The man, from Belmore in Sydney's south-west, has been charged with possession of smuggled goods.

Customs allege the smugglers were attempting to bypass import controls and evade paying duty of US$1.358 million.

Since the beginning of the year, Customs in Sydney has intercepted 65 million smuggled cigarettes and the amount of duty payable on the sticks would have been more than $15.6 million.