The man allegedly groped her chest after asking the actress to pose for a photograph, The Sydney Morning Herald reported.
Hyland, 23, who plays big-eyed teen Haley Dunphy, immediately alerted private security guards at the party Thursday night, and they called police. She was shaken and left early from the event sponsored by Qantas Airways, the newspaper said.
"Sorry to all the fans outside the (hash)qantas event that I didn't get to say hi to but I had to leave due to an inappropriate touch of a fan," she wrote on Twitter.
Her actor-boyfriend who accompanied her to Australia, Matt Prokop, tweeted: "To the (expletive) who assaulted Sarah tonight I hope to God you don't see next week."
An unnamed police spokeswoman told the Morning Herald that the 29-year-old man was arrested at the scene and was charged with assault with an act of indecency, a crime that carries a potential maximum of five years in prison. He was freed on bail to appear in a Sydney court on March 14. Police haven't revealed his name.
Ten Network, which broadcasts the ABC series in Australia and boasts exclusive access to the Australian filming, showed video of a relaxed Hyland acting a scene at Sydney's Bondi Beach on Friday with other cast members.
"Sarah's fine," executive producer Steven Levitan told Ten on the beach.
"Of course, as you can imagine, it's gotten completely blown out of proportion. She's fine. It was handled very, very quickly," he added.
The cast arrived in Sydney this week to shoot an Australian episode. Hyland said they had been enjoying themselves.
"It's a lot of fun to be here, especially with this cast and our crew because we're also so tightknit," she told Ten on Thursday before she was assaulted.
During the day Friday, Hyland shared photos on Instagram in which she indicated she was enjoying the beach.