Police have established two related crime scenes after officers were called to a park off Irwin Street at Werrington in outer western Sydney on Sunday afternoon.
Forensic teams are on the site examining the remote area of a bush reserve, near sporting fields and homes, checking for any clues in bins on the street.
They are also searching a unit, believed to be the woman's residence, about 500m away from where the body was found, ABC reported on Monday.
A passer-by discovered the body, believed to be a middle-aged woman, and is assisting officers with the investigation.
"It appears as though that body has been there for a period of time without discovery," Detective Superintendent Trent King told reporters on Sunday.
How the woman died and why her body, found with clothing and rubbish, was at the location are yet to be determined.
"Until we identify the cause of death, the death is unexplained and certainly in this circumstance we feel it necessary to take it to the highest level until we can disprove that situation," Det Supt King said.
"We're not discounting anything at this stage."
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