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The gunman, Man Haron Monis, an Iranian-born self-styled cleric currently on bail over the murder of his former wife, was killed in the raid. One of the hostages died too. The police stormed the building at about 2.30am local time (3.30pm GMT).
Here is what happened in pictures:
The gunman took control of the Lindt Cafe at about 9.30am local time (10.30pm GMT).
Police rapidly intervened and evacuated the area.
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Every civilian in the area was asked to leave.
Heavily armed officers from the special forces were on the spot, including snipers and anti-bomb military personnel.
Two female staff from the Lindt Cafe were among the first hostages who were able to flee.
They were rescued by the police.
Meanwhile the police had made contact with the gunman, and started to negotiate.
The gunman was identified as Man Haron Monis, a Iranian who fled to Australia in 1996 and had a long criminal record.
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At about 2am local time (3pm GMT), a group of seven hostages escaped.
This triggered the entrance of the police, who stormed the cafe.
The remaining hostages were rescued during the action.
Several were injured.
The police brought in a bomb dispenser robot, as the gunman had claimed that explosive devices were put in place.
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It was later confirmed that two people, one of them the gunman, were killed in the action.