The incident was apparently sparked by detainees whose asylum claims had been rejected, a government spokesman told The Australian newspaper.
Immigration Minister Chris Bowen said an independent inquiry into last month's riots at a detention center on Christmas Island would be expanded to include the incident at Villawood. He said there would also be an Australian Federal Police investigation into the incident.
Bowen said damage at Villawood was "substantial."
A spokeswoman for the Greens political party called for a complete review of the country's detention system, the Australian Broadcasting Corp. reported.
"We know that anxiety and frustration is running high, tensions are boiling over in detention centers, not just in Villawood but across the country," said Sarah Hanson-Young. "Long-term detention, infinite detention, a lack of time limit on detention is ... pushing them to breaking point."