Australian Prime Minister Tony Abbott has said the siege situation in Sydney is "deeply concerning" but police were "well trained and equipped" to deal with it.
In a statement, he said: "New South Wales police and the Australian federal police are currently responding to a reported hostage-taking incident in Martin Place in Sydney.
"I have spoken with NSW Premier Mike Baird and offered him all possible Commonwealth support and assistance.
"The National Security Committee of Cabinet has also convened for briefings on the situation.
"This is obviously a deeply concerning incident but all Australians should be reassured that our law enforcement and security agencies are well trained and equipped and are responding in a thorough and professional manner.
"We will provide regular updates as further information becomes available."
The first hostage to escape the siege in Sydney in which three people including the gunman died has spoken of his relief at his release
The dramatic moment armed police brought the Sydney siege to a bloody end has been caught on camera.
"It was pretty loud, pretty frightening - like nothing I'd ever seen before ever," Greg Parker said.