Police have uncovered drugs, knives and cash during a haul in Melbourne’s south east.

Police have seized more than $60,000 worth of heroin, three knives, cash, casino chips, and a large amount of cigarettes from a car outside a hotel in Hallam early this morning.

Officers were responding to reports of two men appearing to steal a car from a car park of the Princes Highway Hotel when they spotted a large chunk of a tar-like substance believed to be drugs on the floor of a car.

A search was then conducted and a 39-year-old Cremorne man was arrested.

He is now assisting police with their enquiries.