Sydney siege: Thousands pay tribute to victims killed in Martin Place Lindt cafe shootout

Thousands of people have turned out in Sydney to pay tribute to the victims of the Martin Place siege, which ended when police stormed the Lindt Chocolate Cafe early on Tuesday morning.

Barrister and mother of three Katrina Dawson, 38, and Lindt cafe manager Tori Johnson, 34, were killed in the siege, along with 50-year-old gunman Man Haron Monis. Fifteen other hostages survived the ordeal.

Floral tributes have been left by members of the public in what has become a spontaneous memorial at Martin Place, with condolence books also available for people to sign.

On Tuesday, flags on all Commonwealth buildings flew at half-mast in a sign of respect for the victims.

Details have begun to emerge of the moment the siege erupted into a shootout between the gunman and heavily armed police.

It is still unclear exactly how the two hostages died, though multiple sources have told the ABC that Mr Johnson tried to grab the gunman's weapon when he appeared to be falling asleep.

Ms Dawson, who died in hospital after the siege, was reportedly shielding her pregnant friend from gunfire.

"These heroes were willing to lay down their lives so others might live," Catholic Archbishop of Sydney Anthony Fisher said at a memorial service.

People queued for hours to pay their respects at the memorial, which grew throughout the day, with nearby florists struggling to keep up with the growing demand.

"I wanted to put flowers there to remember those [victims]. It could have been me grabbing my morning coffee," one woman said.

Lines at the memorial stretched down the block during the evening, with people filing past the flowers in a silent procession.

NSW Mental Health Commissioner John Feneley said the impromptu memorial provided people with an opportunity to process the respect, loss and grief they were feeling.

"Initially this is a great thing, but we must remember that several weeks from now there will still be those directly involved and also our vulnerability varies from person to person, so some people will feel this more deeply," he said.

"Within an hour of the event occurring I ran into a woman from Kings Cross, she had no association with anybody here, but she was shaken to the core, and that will be the case for many people in NSW who were nowhere near this event.

"That is true also for the emergency services. Imagine what they have gone through and the trauma they have experienced.

"We need to have regard for them and respect the role they played and make sure they get access to the services [they need]."

Three female hostages, aged 75, 52 and 43, who had sustained gunshot wounds, were all in a stable condition.

A police officer, 39, treated for a minor gunshot wound to his face, was discharged from hospital.

Two pregnant hostages, aged 30 and 35, were assessed at the scene.

Fencing covered in black sheeting has been erected around the cafe as police continue their investigations.

Police have advised Sydney is now open and things are back to normal with Martin Place Station also open to commuters.

However, there is an increased police presence in Sydney as part of Operation Hammerhead, which will continue for three weeks, 24 hours a day.

More police, including general police, riot squad, dog squad and mounted police, will be present in public places, sporting grounds and public transport hubs.

Abbott, Shorten and world leaders pay tribute to victims

Prime Minister Tony Abbott visited Martin Place on Tuesday afternoon to pay his respects to the victims of what he called a "absolutely appalling and ugly" incident.

He said it was one of the most difficult periods in Australia's history.

"This is an incident which has echoed around the world," he said.

"Tens, if not hundreds, of millions of people right around the world have been focused on the city of Sydney which has been touched by terrorism for the first time in more than 35 years."

Opposition Leader Bill Shorten also visited the memorial and said he hoped there would be a permanent memorial put in place to the victims of "this cowardly act of deranged evil".

"For the friends and loved ones of two innocent people, 17 hours of dreadful anxiety has ended in unimaginable, heartbreaking loss," he said.

"To all those touched by this tragedy, I join with the Prime Minister in offering the heartfelt condolences of the nation."

America's top diplomat, John Kerry, said the United States was grieving with Australia.

Speaking in London, Mr Kerry said the US was thinking about its friends in Australia.

"We know in a very personal way what our ally in Australia is going through at this very moment and we grieve with Australia, with the families of all those terrorised, injured and killed," he said.

British prime minister David Cameron also paid tribute to the victims of the siege, saying his thoughts were with the people of Australia.

"There are tales of extraordinary bravery and sacrifice that are now being told about what happened in that cafe, and I think that's what we'd expect from the people of that remarkable and great country," he said.

Victims remembered by family and friends

Mr Johnson's family said in a statement they would carry his memory with them and passed on their condolences to Ms Dawson's family.

"We are so proud of our beautiful boy Tori, gone from this Earth but forever in our memories as the most amazing life partner, son and brother we could ever wish for," the statement said.

"We feel heartfelt sorrow for the family of Katrina Dawson."

The NSW Bar Association said Ms Dawson had been held hostage with two other barristers.

"Katrina was one of our best and brightest barristers who will be greatly missed by her colleagues and friends at the NSW Bar," the association said in a statement.

"She was a devoted mother of three children and a valued member of her floor and of our bar community.

"Our thoughts are with her family at this time, including her brother Sandy Dawson of Banco Chambers."

Seventeen people were taken hostage by Monis shortly before 10:00am on Monday morning, but five ran free later that afternoon.

Police stormed the building on Tuesday morning after explosions and yelling were heard about 2:10am (AEDT).

Monis, who was granted political asylum in Australia in 2001, was on bail for a string of violent offences, including being an accessory to the murder of his ex-wife.

He was also facing more than 50 sexual and indecent assault charges and had a conviction for sending abusive letters to families of deceased Australian soldiers.