The man, who cannot be named for legal reasons, stands accused of sexually assaulting the child inside their northern Illawarra home sometime between January and April this year.

Court documents reveal police from the Illawarra child abuse squad received a report on April 5 after the child allegedly told an adult her "private parts" hurt because her father "put his fingers in there".

Detectives interviewed the girl at her school the following day.

She allegedly told them "he only put it [in] a little bit".

The father was arrested outside the school that afternoon and taken to Wollongong Police Station where he was charged with one count of sexual intercourse with a child under the age of 10.

The man allegedly told police he did not assist his daughter with bathing, getting dressed or using the bathroom and "never goes near her private parts".

The man was remanded in custody following his arrest but sought release on bail during a recent court appearance.

The court heard both his mother and grandmother suffered from serious medical conditions and did not have long to live.

The man said he would agree to onerous conditions if released on bail including staying away from his daughter and not trying to contact her.

Police opposed the man's application, however Magistrate Claire Girotto agreed to grant him bail on the condition he abide by a nighttime curfew, stay away from his daughter and not be in the company of any child under 16 unless they are supervised by a parent.

The matter will return to court at a later date.

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