An employee of the Summerhill Waste Management Centre in Newcastle noticed the legs protruding from a pile of general trash on Tuesday afternoon, New South Wales state police said in a statement on Thursday.
"It appears that the legs were surgically removed and may have ended up there by mistake," the statement said.
Police removed the legs for forensic examination from the dump, which is operated by the city of Newcastle, 160 kilometres north of Sydney.
A police spokeswoman could not say whether the legs were from the same person.
Medical waste including syringes and blood vials were also removed from the same rubbish pile, police said.
The state government environment agency is investigating the incident. State health authorities and the Newcastle municipal administration were assisting the investigation. Police do not suspect a crime.
State opposition health spokesman Walt Secord told Australian Broadcasting Corporation that it appeared strict protocols demanding the incineration of body parts had not been followed by hospital authorities.