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A deal has been done with rival bikie gang the Comanchero to "'divvy" up the lucrative eastern suburbs drug trade, police sources said.
The Hells Angels announced the Bondi chapter on their website yesterday.
Police intelligence indicates the Hells Angels recently established a clubhouse close to Bondi but not on the beach.
"We know both gangs have been looking to set themselves up there," a senior NSW police officer said.
"The two groups would have come up with some sort of boundary line between Maroubra and Bondi."
The Comanchero have traditionally had strong footholds in Maroubra and Coogee.
"It's pretty obvious the two have spoken to each other and decided on who has what territory," the officer said.
Two years ago a series of incidents, including a car bombing in the eastern suburbs, were attributed to a turf war between the Comanchero and Notorious.
Police suspect the recent peace deal may have come about with many of the Notorious members now "patching over" to the Hells Angels.
The officer said both gangs were on recruitment drives and constantly looking for new areas to expand.
