Police received reports from correctional officers about two men flying a drone above a prison in Cooma, in southern NSW, about 1.10pm on Friday.
The drone, which had a "large item" hanging underneath it, veered off course and crashed into a nearby creek bed, a bail court was told on Saturday.
The man allegedly flying the drone, Edmond Alija, 31, was tackled to the ground by corrective services officers before being arrested by police.
The court was told Simon Mihajlovski, 38, was arrested nearby.
Police allege a green sock containing methamphetamine, cannabis, tobacco, superglue and a mobile phone was attached to the bottom of the drone.
The items were worth a combined total of about $130,000 inside prison, the court was told.
Officers allegedly found a drone box and controller, a mobile phone and SIM cards in a red Audi parked nearby, which police said belonged to Alija.
The men were each charged with operating a drone in prohibited airspace, unlawfully attempting to deliver anything to an inmate and supplying drugs.
Police said Mihajlovski told them he was asked by his co-accused to come for a drive in his Audi and had no prior knowledge of the alleged plot.
"Your honour may have some trouble accepting that," the police prosecutor said.
He argued against the 38-year-old receiving bail, citing concerns he could interfere with witnesses and evidence.
Mihajlovski's lawyer Jacklyn Dougan-Jones told the court her client owned the drone but his co-accused had allegedly operated it.
She said her client planned to plead not guilty to the charges.
Mihajlovski was granted bail on strict conditions, including that he does not contact his co-accused.
He will return to Cooma Local Court in November.
Alija did not appear at his earlier court mention, which was told he would not be applying for bail.
He will return to court in October.
The incident follows a thwarted attempt to drone-deliver a cache of mobile phones, SIM cards and Allen keys to another NSW prison earlier in September.
Prison staff intercepted the items after they were dropped on a roof at Goulburn Supermax prison on September 5.
In Queensland, a man was charged in August after an investigation into a brazen attempt to smuggle a million-dollar payload of drugs and associated paraphernalia into the Townsville Correctional Complex.
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