CANBERRA - Australian Prime Minister Tony Abbott confirmed on Tuesday that the gunman at the center of the Sydney siege, in which two hostages were shot dead, was known to the Federal Police and had an"infatuation with extremism".

Abbott described the hostage drama, which brought central Sydney to a standstill, as a "brush with terrorism".

While there remains confusion regarding the motivations behind the attack, Abbott suggested the perpetrator, named as 50-year-old Man Haron Monis, sought to "cloak his actions" with certain Islamic State terror groups.

Addressing the media in his first press conference since the conclusion of the dramatic 16-hour siege, Abbott confirmed that Monis took 17 hostages, with two of them, and the gunman, dying at the scene.

"Early this morning the Martin Place siege ended with the death of the lone gunman and, tragically, the loss of two hostages, innocent Australians caught up in the horror of yesterday (Monday) ", Abbott said on Tuesday.

"Five other people, four hostages and a NSW police officer, were injured. State and Commonwealth agencies are investigating.

"Understandably, there is lot of speculation, but it will take time to clarify exactly what happened in Martin Place and why".

Police stormed the cafe in Sydney's Martin Place just after 2. 00 am local time.

Although it is not yet known to Commonwealth or State authorities what the motivations behind the attack were, Abbott revealed links to Islamic State groups and that the gunman had a long history with violent crime.

Monis, an Iranian cleric, was on bail for being an accessory to the murder of his ex-wife, as well as facing more than 40 charges of sexual assault. He had previously been convicted for sending offensive letters to families of deceased Australian soldiers.

"What we do know is that the perpetrator was well known to State and Commonwealth authorities," Abbott continued. "He had a long history of violent crime, infatuation with extremism and mental instability.

"We know that he sent offensive letters to the families of Australian soldiers killed in Afghanistan and was found guilty of offences related to this. We also know that he posted graphic extremist material online."

"As the siege unfolded yesterday, he sought to cloak his actions with the symbolism of the ISIL death cult. Tragically, there are people in our community ready to engage in politically motivated violence."

"The events in Martin Place also show that we are ready to deal with these people professionally and with the full force of law."

It has not yet been confirmed exactly what prompted police officials to enter the cafe in the early hours of Tuesday morning, but Abbott thanked both Commonwealth and State authorities for their tireless work throughout the day and night.

"I want to thank the New South Wales (NSW) Police and all the other agencies involved for their professionalism and courage," Abbott said.

"Yesterday, Premier (Mike) Baird showed great steadfastness and Sydneysiders can be proud of their calm during what was a very difficult and testing day."

"Australians should be reassured by the way our law enforcement and security agencies responded to this brush with terrorism."

"There is nothing more Australian than dropping in at the local cafe for a morning coffee and it's tragic beyond words that people going about their everyday business should have been caught up in such a horrific incident."

"Our hearts go out to all of those caught up in this appalling incident and their loved ones. On behalf of all Australians, I extend my sympathy to the families of the two hostages who died overnight."

Abbott also praised the resilience of Australians, saying the response to the tragedy proves their readiness to react to such incidents.

"These events do demonstrate that even a country as free, as open, as generous and as safe as ours is vulnerable to acts of politically motivated violence but they also remind us that Australia and Australians are resilient and we are ready to respond," he said.

"Now, I do intend to go to Sydney early in the afternoon to be further briefed by NSW police and other security agencies. I also intend to say thank you as best I can in person to NSW Police officers and others involved in this appalling incident."

"I'll do more media then and I'll take questions at that time when we do have a better idea of exactly what has happened."

"Plainly, there are lessons to be learned and we will thoroughly examine this incident to decide what lessons can be learned but I do want, now, in the hours immediately after the conclusion of the siege, to offer these words of comfort to those caught up in it and reassurance to the Australian people," the Australian prime minister added.