A Sydney man accused of killing a woman before unleashing "terrifying carnage" in a stabbing rampage in Sydney's CBD was allegedly carrying material about mass casualty terrorist events.
Mert Ney, 21, was arrested on Tuesday after he allegedly stabbed a 41-year-old woman at the Hotel CBD about 2pm and then tried to stab countless others as he wandered the streets before being detained near Wynyard station.
The body of a 21-year-old woman was subsequently discovered at a Clarence Street apartment with NSW Police Commissioner Mick Fuller stating the homicide and stabbing were linked.
Mr Fuller said Ney was at the apartment for "business purposes". It's been reported the 21-year-old victim was a sex worker.
Video footage shows Ney, who was armed with a large butcher's knife, yelling "Allahu Akbar" while wandering the CBD.
Mr Fuller says Tuesday's rampage was "not currently classed as a terrorist incident" by authorities and the "lone actor" had no links to terrorist organisations.
Ney did, however, have "some ideologies in relation to terrorism".
"There was certainly information found on him about other crimes of mass casualties and mass deaths around the world," Mr Fuller said, adding the material was discovered on a USB drive.
"It will certainly be reassessed by the Joint Counter Terrorism Team to see if we have to reassess that terrorism threat."
The Marayong man, who's under police guard in hospital, had a history of mental health issues.
He was known to police but Mr Fuller said his history was "unremarkable" compared to the gravity of Tuesday's alleged crimes.
Police will examine how Ney went from "seemingly getting on with his life" while living with his parents in western Sydney to allegedly committing such "horrendous crimes," the commissioner added.
Mr Fuller was asked about reports the 21-year-old may have absconded from a mental health facility before "breaking" on Tuesday.
"If I was forced to make a call ... the evidence all points to that," he replied.
Police were initially notified about 2pm that a man armed with a knife and wearing a balaclava was on York Street. Witnesses said the man appeared drug-affected.
What followed was six minutes of "terrifying carnage", Mr Fuller said.
The 41-year-old woman was stabbed in the back in a random attack at Hotel CBD. She's in a stable condition in hospital.
Three members of the public who gave chase and detained the attacker using chairs and a milk crate were "highest order heroes", the commissioner concluded.
Paul O'Shaughnessy and his brother Luke were among the trio who held Ney down until police arrived.
"For us, it was just about restraining him," Paul O'Shaughnessy said.
"My brother, he was the hero. He got a grip of him, along with another guy we don't know, and put a crate on his head. He was just mumbling religious things."
Superintendent Gavin Wood said the men's intervention had stopped other people from being hurt and described them as "significantly brave".
"These people are heroes," he told reporters.
Mr Fuller said while police weren't looking for any other offenders they couldn't discount coming across other crime scenes as the investigation continues.
Officers are searching Ney's western Sydney home.
He's expected to be charged with murder as well as serious assault in relation to the stabbing.