It is understood the security guard overpowered his colleagues while the cash was in transit to the Bank of PNG in Port Moresby.
Security company G4S was escorting the money when the robbery took place on Friday.
Assistant Police Commissioner Jim Andrews told The National that the vehicle was transporting boxes of money from the G4S security company base in Konedobu to the Bank of Papua New Guinea.
He said the heist was so quick that when police and security company representatives arrived on the scene, the suspects had long gone.
Local media reported that one the guards held the others at gun point, directed the vehicle to a drop-off point before escaping with waiting accomplices in getaway cars.
The cash belonged to the local branch of Malaysian institution Maybank.
Andrews said police had made some progress in their investigation.
"They got the key from the driver of the armoured vehicle, opened the back locker of the vehicle and moved out all the money boxes," he said.
"Three suspects have been arrested so far. A group of detectives is investigating the case.
"Police have now conducted fingerprint tests and a forensics team has done further tests on the armoured vehicle that was recovered."