Heavily armed police stormed the Sydney cafe to end a more than 16 hour siege by a gunman holding around 15 hostages in a volley of explosions and flashes, television footage showed early Tuesday.

AFP reporters near the scene heard a series of loud bangs, flashes and yelling as police moved in after several hostages ran out of the building in the city centre and medics moved in to help.

It was unclear if all the hostages had escaped although New South Wales police confirmed the siege by a gunman brandishing an Islamic flag was over more than 16 hours after it started in the heart of Australia's biggest city.

Several stretchers were wheeled into the building, but it was unknown how many people may have been injured.

Five people had fled the cafe to safety earlier in the day and five more -- three women and two men -- were seen running out before the police attack.

At least one more woman was later carried out by paramedics.

Bomb squad officers sent a crawler robot into the Lindt chocolate cafe on Martin Place, an AFP reporter said.

Three men wearing full anti-bomb protection gear were seen outside the building.

Police had refused to comment on earlier reports that several bombs had been planted in Sydney or to reveal how many hostages had been taken.

Channel Seven reporter Chris Reason, whose newsroom is opposite the cafe, tweeted earlier: "From inside Martin Place newsroom, we've counted around 15 hostages -- not 50 -- mix of women, men, young, old - but no children."

The hostage-taker was named by ABC television and other media as an Iranian-born "cleric" called Man Haron Monis. They published a photo of him sporting a beard and a white turban.

The pre-Christmas siege of the Lindt chocolate cafe began Monday morning and triggered a massive security lockdown in the heart of Sydney as hundreds of armed police surrounded the site.

Monis was "on bail for a string of violent offences", said ABC, the national broadcaster.

Australia has been on high alert with the government raising concerns that citizens who have fought alongside Sunni jihadists in Iraq and Syria could return home radicalised and carry out "lone wolf" attacks.