Pic: 7 News
Terrorist group Islamic State is claiming responsibility for Monday's deadly Melbourne siege, that left two people dead and three police officers injured.
"The attack in Melbourne, Australia was carried out by a soldier of the Islamic State in response to the call for targeting the subjects of the coalition states," the group's Amaq news agency said.
The attack is being blamed on Australia helping out the US-led coalition against the militant group.
Victoria Police have confirmed they are investigating if the attack was terror related, with Chief Commissioner Graham Ashton confirming they were aware of the man behind the attack.
"The reasons for that are that this person has a background in relation to terrorism matters, albeit some years ago," he told Nine.
"He is someone certainly known to us from his background but certainly as of yesterday there wasn't anything that we had that suggested that he was planning on embarking on this, that this was anything more than a spontaneous act."
Victorian Premier Daniel Andrews and Mr Ashton will hold a press conference at 8.30am on Tuesday to address fears of a terror link.
Yacqub Khayre, the man behind the attack, was acquitted over the terror plot to launch a suicide attack against Sydney's Holsworthy army barracks in 2009 after a trial in 2010.
In 2007, he was charged with armed robbery after holding up passengers on a Melbourne train, leaving one man with knife wound.
Three special operations officers were shot in the siege, in Melbourne's affluent suburb of Brighton.
The ordeal started around 4pm Monday, when police attended reports of an explosion at the Buckingham Services Apartments in Bay Street, and found a body in the foyer of the building.
Police brought to an end the stand off by shooting dead a man behind the two-hour siege with one hostage at around 6pm.
Two police are in hospital, one treated at the scene, none of the injuries are life threatening and they are expected to make a full recovery.
While the hostage is also safe.