Hostages could be seen fleeing the cafe as police moved in
Heavily armed police have stormed a cafe in Sydney where a gunman identified as an Iranian refugee has been holding dozens of people hostage.
Paramedics carrying stretchers raced towards the cafe moments after a volley of loud bangs and flashes.
Central Sydney has been in lockdown since the gunman seized the hostages early on Monday morning.
Early in the siege, hostages were forced to hold up a black Islamic banner at the window.
The cafe is located in Martin Place, a busy shopping area in Sydney's financial district.
Footage showed people fleeing the building
Prime Minister Tony Abbott said it was "profoundly shocking" that people were being "held hostage by an armed person claiming political motivation".
Mr Monis is well known to the Australian police
The suspect, identified as Man Haron Monis, who received political asylum in Australia in 1996, was on bail facing a number of charges.
He was described by his former lawyer as an isolated figure.