Emergency services were called to Killarney Vale early on Wednesday, May 18, following reports of a fire.
The alert went out about 6.40am and Fire and Rescue NSW crews rushed to the scene on Avery St, where a garage was well alight.
Fire crews quickly extinguished the fire but the garage was extensively damaged.
A 26-year-old woman who was home at the time was uninjured.
Officers from Tuggerah Lakes Police District secured a crime scene and commenced an investigation.
Following inquiries, about 8.10pm on Thursday, May 19, police arrested a 25-year-old woman at a home on Gossimer St, Killarney Vale.
She was taken to Wyong Police Station where she was charged with damage property by fire/explosion (DV) and for an outstanding warrant relating to failing to appear at court.
The 25-year-old woman was refused bail until her appearance at Wyong Local Court.
Police say both women are known to each other.
Tuggerah Lakes Police District