A military Hercules (C130) aircraft had departed Richmond, NSW for Canberra, ACT and was initially assigned climb to 6,000 ft by Departures South control (DepS). The intention of the controller was to climb the C130 to be at a level above that required for arriving aircraft to have vacated on descent, by the crossing point of the tracks. Such a climb would have required the C130 to reach 9,000 ft before the respective tracks came into conflict. A Boeing 747 (B747) was inbound to Sydney, NSW on a flight from Melbourne, Vic. and had been assigned descent to 6,000 ft, via an appropriate standard arrival route, by Approach South control (AppS). As the two controllers radar vectored their respective aircraft, the Departures North controller (DepN) observed that the aircraft were coming into conflict and alerted both the AppS and DepS controllers. Radar vectors and traffic information were given to the crews of both aircraft and they passed within 2 NM of each other at the same height. The separation standard is 3 NM in this situation and, therefore, a breakdown of separation occurred. Sydney airspace is divided into various areas of jurisdiction and, in this case, AppS had descended the B747 in accordance with this airspace management agreement. However, the controller did not notice that the C130 was at an innapropriate altitude and in his area of responsibility. The DepS controller had a choice of methods that he could use to separate the C130 from arriving traffic. He could have instructed the C130 to maintain 5,000 ft, ie 1,000 ft beneath the allocated arrival altitude, or, as he chose in this case, he could have directed the C130 to climb to an altitude above that required by the arrival procedure. The workload and complexity of the traffic situation for the DepS controller was high, and although his plan of action was sound, he forgot to instruct the C130 to climb. SIGNIFICANT FACTORS 1. The workload and complexity of the task of the DepS controller were high. 2. The DepS controller forgot to take the action which would have guaranteed the separation between the B747 and the C130. 3. The AppS controller did not notice that the C130 was at an inappropriate altitude for its track.