Australian police called in to investigate a body found in a suitcase have concluded that the "victim" was in fact a lifelike doll.

The suitcase was discovered by two men on the side of a road near the small village of Oallen, about 230km (143 miles) south-west of Sydney.

On Monday, police announced a murder investigation, sparking intense interest in the case but backtracked hours later, saying forensic testing had proved the contents were not human.

The contents in the suitcase were "mistaken for a human originally, so they are very realistic in terms of looking like human remains," said Supt Linda Bradbury from the Hume Police District.

"But we've confirmed by other means that they are not."

The doll was wearing clothing, had hair and a nose piercing," police said, adding that "the item also had markings that resembled bruises and grazes".

Supt Bradbury said forensic teams and investigators had attended the scene on Sunday and that all processes had been followed.

"The idea is to not disturb crime scenes as much as possible, to maintain the integrity of our investigation," Bradbury said, adding she had "no regrets" about how the case was handled.

Hours earlier, Bradbury had told media that it has been "quite a shocking discovery" for the two men who found the suitcase.

"Unfortunately, they were on a weekend drive as a lot of people do over the weekend and stopped for a break," she said.

She said the pair had made the "right decision" to report the find.

"They were affected yesterday and we will be in touch to let them know that it was not human remains," Bradbury said.

Police have now closed their investigations.