It looks like an Egyptian obelisk, but in fact it is only a ventilator for a sewer. On its completion in 1857, the local press dubbed it Thornton's Scent Bottle, George Thornton (1819-1901) being the Mayor of Sydney who erected it and came under heavy criticism for wasting money for building it. The obelisk remains a mysterious element in the Sydney city streetscape.

The obelisk on Elizabeth Street, which terminates the vista at Bathurst Street and is a strong element in the Hyde Park landscape, is one of the earliest monuments recording the beneficence of a Sydney mayor. It was modelled on Cleopatra's Needle on the banks of London's River Thames, having the same dimensions as Cleopatra's Needle, and is sometimes referred to as the same name. The overall structure is 22 metres high, which comprises a square sandstone base 6.5 metres high. The vent at the top is a filigreed bronze pyramid.
An obelisk is a derivative style of Egyptian monument. The Victorians had a mania for all things Egyptian. This is reflected in the architectural style chosen for the sewer vent. The monument bears Egyptian details, including these sphinxes carved above the pedestal. It was originally constructed with two smaller obelisks standing on either side of it (left), but these have since been removed.
The Hyde Park obelisk has been modified several times in 1871, 1890 and 1908 and is one of the oldest free standing monuments in Sydney. It also takes the honour of being the oldest surviving structure in Hyde Park
The system of main sewers that are still used by the City of Sydney were laid by the City Council up to 1854, and the obelisk is part of that system. The Egyptian style obelisk was erected in 1857 It was erected over a sewer vent as an  experiment for ventilation. The theory being that, the stench from the sewer rose up through the shaft and expelled the foul smelling air high enough into the atmosphere that the human nostril couldn't whiff the horrid odour.
Needless to say the experiment was a failure, but that didn't stop it being replicated in Western Australia nearly 85 years later (their experiment was called Dumas' Folly).