SYDNEY - The manager of the Sydney cafe who was fatally shot in the siege was being praised as a hero on Tuesday for allowing others trapped in the cafe to escape.

Three people were killed, including the hostage taker, in the 17-hour siege which involved a lone gunman and 17 hostages and began on Monday morning.

Tori Johnson, 34, was wrestling a gun from hostage taker Man Haron Monis when he was killed, according to the Australian Broadcasting Commission (ABC).

According to reports from the hostages, it is understood the cafe manager decided to take action when Monis started to fall asleep at 2 am on Tuesday after the siege had been ongoing for 17 hours.

Johnson lunged at the gunman's weapon, enabling others to flee.

The second hostage killed has been identified as mother-of- three Katrina Dawson, 38. Dawson was killed trying to defend her pregnant friend, the Australian Associated Press reports.

Various media have reported that Monis forced the hostages to call them to present his demands. All the media did not cooperate and did not relay these messages.

Before the police raided the cafe at around 2 am, a group of hostages ran out of the building. At that point police stormed the cafe using stun grenades and firing rifles.

The 50-year-old Monis, an Iranian refugee and self-styled sheikh on bail for an accessory to murder charge, was pronounced dead at hospital.

Four hostages were injured including two women, who have been taken to a hospital with non-life threatening injuries, another woman who suffered a gunshot wound to her shoulder and a police officer who was treated for a gunshot wound to the face.

Addressing the media on Tuesday morning, New South Wales (NSW) Commissioner Andrew Scipione said police were still trying to find out the exact details of siege. "We need to actually find out what's happened here and what's happened inside that cafe," he said.

NSW Premier Mike Baird has also addressed media, paying tribute to the families of the deceased and hostages, and rallying the people of NSW to "come together like never before".

Australian Prime Minister Tony Abbott has released a statement this morning following briefings with the NSW premier and police commissioner.

"Our thoughts and prayers are with the families of the two deceased hostages, the wounded and the other hostages," he said.

"I commend the courage and the professionalism of the New South Wales Police and other emergency services."

Abbott will travel to Sydney on Tuesday to be further briefed by NSW police and other security agencies.

The authorities have commenced an extensive investigation and cleared for risk of explosives.

Throughout Tuesday morning, the public have been laying flowers near the cafe in Martin Place.

Police have been reluctant to reveal details of what prompted them to storm the building, but it has been reported hostages took the opportunity to escape as their captor began to doze off.

Scipione said police had no choice but to enter the building, after hearing gunshots and feared hostages had been hit.

"They made the call because they believed at that time if they didn't enter it would have been many more lives lost," Scipione said.

Monis was also charged this year with indecent and sexual assault of women in 2002. He was hit with an additional 40 charges in October.

Monis, who was originally from Iran and lived in southwest Sydney, had previously sent offensive letters to the families of dead Australian soldiers, calling them "murderers", the Daily Telegraph said.