More than 300,000 people have packed out Sydney's Oxford Street for one of the largest and most colourful Mardi Gras parades ever.

Almost 10,000 gay and lesbian participants, led by gold-medal winning Olympic diver Matthew Mitcham, hit the streets dressed in everything from lifesaver and nurse uniforms to fluoro bikinis.

For the first time, Oxford St was named an alcohol-free zone as a record 135 parade floats thrilled onlookers.

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