Sydney cafe siege tributes and investigation
Members of the public look at floral tributes placed near the cafe where hostages were held for over 16 hours, in central Sydney.David Gray/Reuters

Australian authorities have begun an investigation into the 16-hour siege in the Lindt cafe in Sydney, which resulted in the death of three including the attacker, identified as Iranian refugee Man Haron Monis - as tributes continue to pour in.

Two hostages – Tori Johnson, 34 and Katrina Dawson, 38 – died when special forces operatives stormed the cafe to take out the gunman.

Investigators are looking into the motives of the 50-year-old "lone gunman", who was known to have had extremist leanings and a criminal record.

When asked about the offender being released on bail even though charges were pending against him, authorities said there could be many factors involved.

Pauline Wright, vice president of NSW Council of Civil Liberties, said: "One of the major factors that has got to be considered, of course, is the seriousness of the offence. Another factor is how strong the prosecution case is. If the prosecution case is not very strong and it's all circumstantial rather than hard evidence, then that person is more likely to get bail, even if it is a really serious offence."

Authorities have not revealed the exact events of the operation but said they acted in emergency after shots were heard.

A thorough investigation will be carried out by the New South Wales Homicide Squad, which is expected to take weeks.

Meanwhile, tributes have been pouring in from across Australia and parts of the world.

In New South Wales, flags are flying at half mast at all state buildings.

Prime Minister Tony Abbott and his wife arrived at the vigil taking place in Sydney's Martin Place to pay tributes. The couple laid a large bouquet of flowers at the ceremony.

Abbott is expected to address a press conference shortly along with the NSW Premier Mike Bird.