The young stag was hit and killed by a BMW on Old South Head Road, only a few hundred metres from the bustling hub of Bondi Junction, at 6.50pm on Friday.

The driver of the BMW 7 Series sedan stopped at the scene and was later breath tested by police. He returned a negative result. 

Christopher Zinn was cycling home when he encountered the unusual scene, posting a photograph on Twitter just moments after the accident.

"I saw a car stop, I saw a hairy thing in the road and thought it was an Irish wolfhound," Mr Zinn said. 

"Then I got closer and saw these great big long legs and thought, 'No, it's a kangaroo.' And then I saw it was a deer. It wasn't visibly injured and it wasn't visibly in pain, it was just in deep shock and then it expired."​

Mr Zinn said the BMW driver "was a little shocked and upset, but ... there was obviously nothing he could do. Deer are particularly fast and nimble."​

The deer had earlier been sighted on busy Bondi Road, he said. "The question is, where did it come from?"

A taxi driver who spotted the deer at  2am on Friday morning on MacPherson Street in Bronte supplied Fairfax Media with a video of his encounter.

There is a large feral deer population in the Royal National Park, south of Sydney, and deer frequently wander into gardens in suburban Wollongong, where the the council considers them a "priority pest".

But Woollahra - in one of Sydney's billion-dollar neighbourhoods - is only five kilometres east of the CBD. 

Bondi Junction resident Grant Levy said he couldn't believe it when the deer ran into the yard of his home in Paul Street about 6.20pm.

"I was standing on my balcony, just lighting the barbecue, when I saw the deer running from my drive down the path into my back yard," he said. "I pinched myself because I couldn't imagine seeing a deer in the middle of Bondi Junction."

Mr Levy called the wildlife rescue organisation WIRES, which had responded to an earlier sighting of the deer.

"A man had called WIRES from his car to say he was following a deer down Bennett Street in Bondi Junction and they obviously thought he was hallucinating," Mr Levy said.

"By the time WIRES got down there the deer had disappeared and because of the population density with the houses they couldn't think where to begin looking for it - it was an absolute needle in a haystack."

Mr Levy contacted the Bondi Junction Veterinary Hospital, where Dr Chris Brown, star of the TV series Bondi Vet, practises, and staff arranged for Waverley Police to assess the situation. But as officers approached, the deer leapt over a two metre-high wall and disappeared.

"You could see it was petrified," Mr Levy said.

He only heard on Saturday that the deer had been killed. "It is a very sad ending," he said. "The most perplexing thing is where it came from because I was told ... that no one had reported it missing from a local petting zoo."

Robin Grindrod, a volunteer with Sydney Wildlife - which cares for sick, injured and orphaned native wildlife - was contacted on Friday night after Mr Levy spotted the deer and was arranging to have it tranquilised when it met its sad end.

She said it was a "spiker", a young male with small antlers, and that she had never heard of any deer living so close to central Sydney. "Where it actually came from is a complete mystery," Ms Grindrod said. Deer "are grazing animals, so it would have been seen" had it been in nearby Waverley Park. 

On Friday night a police wagon delivered the dead deer to the Bondi Junction Veterinary Hospital, where vet Ray Chan was on duty. The carcass is being stored in a freezer.

"I don't think anyone would have been able to change the outcome," Dr Chan said. "Cars and wildlife, especially scared wildlife, don't mix well."

Like everyone else, Dr Chan speculated about the deer's origins. He wondered whether someone had picked up a fawn in the country "and it found its way into one of the parks and stayed hidden and grew up."

He said it would be "pretty spectacular" if a deer had made its way from bushland "deep into the Junction, without being seen or hit by a car on the way here. Who knows where this poor deer came from?" 

Inspector Sam Fordy, of the Eastern Suburbs Local Area Command, said police were continuing their investigations into the collision, with further inquiries as to how the deer came to be in the area.

"It is different to have a deer in the CBD of Bondi," she said. "I would think that if the deer had been in Centennial Park, the rangers would know about it.

Mr Levy said while there was some forestation in Woollahra's Cooper Park, he had never heard of deer there. A firefighter joked that it escaped from department store Myer's Christmas display.

Mr Zinn wondered whether the deer had been destined for someone's dinner. "Maybe someone had got it for some slaughter purposes or a weekend barbecue," he said. "That's no more unusual than any other theory. If you live in Bondi long enough, you know that anything can happen in Bondi."