The startling discovery came after emergency crews responded to a kitchen fire on Sunday at the Wollongong property of Glenn Potter, a senior leader of the Electrical Trades Union NSW/ACT branch.
The crews tipped off police about the "numerous firearms" found that were not stored safely.
Police raided the property on Monday reportedly seizing dozens of guns and $121,650 in cash alleging the amount was from the the proceeds of crime on Monday.
Mr Potter was found to have allegedly possessed 167 guns in his home.
Officers arrested the 66-year-old when he returned home and charged him with six offences.
These included not keeping firearms in a safe place and not complying with the conditions of a holding a firearms licence.
The government passed tough gun laws in December capping the number of guns per owner, limiting magazine capacity and tightening firearms licence regulations after the Bondi terrorist attack left 15 people dead.
The ETU has been a major donor to NSW Labor, which the coalition has criticised Premier Chris Minns and his government for being friendly with.
NSW opposition industrial relations spokesperson James Wallace said the premier needed to act swiftly.
"Until the public is assured there is no wrongdoing at the ETU, Minns must suspend the ETU's affiliation with the NSW Labor party and refuse to take any more donations from the union," he said.
The union said Potter, an electrician at Sydney Trains, was placed on leave on Wednesday.
"During this period, the president will not be involved in any financial, operational or governance matters of the union, nor represent the ETU in any official capacity," the union said in a statement on Thursday.
"All decision-making authority relating to financial management, governance and strategic oversight will be exercised by the State Council Executive, and the secretary in accordance with the rules of the union."
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