The boy was sedated and distracted with smartphones while emergency crews worked with angle grinders to cut open the machine. Photo: 9NEWS

Leo, four, was on holiday with family in Melbourne when he spotted the machine in a hotel lobby.

Reports said the boy was attempting to reach a packet of biscuits when his arm became stuck in anti-theft mechanisms.

He was sedated and distracted with smartphones while emergency crews worked with angle grinders to cut open the machine.

Witnesses said they could hear his screams from the street.

The boy was taken to the Royal Children's Hospital in a stable condition.

Leo's father Aaron Shorthouse said the experience was very hard on his son.

"We live up in Arnhem Land, Northern Territory, and I don't think he's seen a vending machine before, so he saw the Oreos, and some biscuits and a few other things," Mr Shorthouse told local media.

Arnhem Land is a remote region of the Northern Territory with a population of just 16,000 stretched across 97,000 square kilometres (37,000 square miles).