Police at an armed siege at the Lindt cafe in the CBD with staff being held at gunpoint. Picture: Richard Dobson Source: News Corp Australia

But authorities have assured people they will get home.

NSW Premier Mike Baird and Police Commissioner Andrew Scipione said police were doing all they could to bring an end to the situation peacefully, while urging people to remain vigilant.

Mr Baird stressed it remained business as usual as he urged everyone to “exit from the city as you normally would”.

However he asked people to remain vigilant as they moved across the CBD and to be patient as there may be some disruption, adding “we will get through this”.

The Police Commissioner said while it was a difficult day for all involved, the city was still operating.

Police remain on guard in Sydney’s Martin Place. Picture: Chris McKeen Source: News Corp Australia

“Transport arrangements are in place so that people can leave the city,” he said.

Mr Scipione confirmed police had evacuated the immediate area around the cafe and streets remained closed. However, most transport services remain in place so people can leave the city.

Following the release of three hostages just before 4pm, Deputy Commissioner Cath Burn said the situation wasn’t over yet.

She urged those who remained in buildings facing into Martin Place to stay indoors until police advised them to leave.

“For everybody else, it’s okay to leave,” she said.

“Our priority is the safety of the people in the cafe and the safety of the people of NSW.”

Police have established a perimeter around Hunter, Pitt, King and Elizabeth streets but otherwise public transport is operating pretty close to normal.

“It’s okay to leave the city and okay to go home as you normally would,” she said.

Ms Burn said people could check transport info lines and there is also a safety site in Hyde Park and a national inquiry line (1800 227 228) which could help people with their inquiries.

Their comments come as the Lindt Cafe in Martin Place remains surrounded by police with a number of hostages seen in the windows.

Police evacuated the area and transport in the city has been severely affected.

A Sydney Transport spokeswoman earlier told news.com.au trains were affected between Central and Bondi on the eastern suburbs and Illawarra line.

MORE: Live updates Martin Place siege

“Trains are still running on the city circle but that might change as authorities follow direction from police,” she said.

Sydney Transport said trains had now resumed between Central and Bondi Junction but were not stopping at Martin Place.

Staff and customers at the Lindt cafe hold what is believed to be a jihadist flag up against the window. Source: Channel 7

She added buses are being diverted away from Elizabeth and Hunter streets and police are closing roads subject to change.

Sydney Buses has warned commuters to expect some delays through the day.

City Transport are continuing to recommend people stay away from the Sydney CBD and Martin Place station remains closed.

Various roads across the CBD remain closed as the operation continues but authorities have warned to expect delays.

NSW police earlier confirmed an operation was under way at Martin Place and have released a statement urging the public to remain calm.

“Police and emergency services have responded and a number of streets around the area have been closed,” a statement reads.

“The Martin Place train station is also shut.

“Police are dealing with an armed incident and specialist officers are attempting to make contact those inside a cafe.”

Police said nearby offices had been evacuated as a precaution and anyone else in the area encompassing Hunter, George, Elizabeth and Macquarie streets bordering Martin Place was directed to remain indoors and away from open windows.

While buses and some train services have been affected, air services were not.

A spokesman for Deputy Prime Minister Warren Truss told news.com.au that the airspace over the Sydney CBD was not in shut down.

“There are choppers in the air and air traffic is being rerouted according,” he said.

“At this stage no impact on the air traffic network.”

A Sydney Airport spokeswoman also confirmed that the incident was not affecting airport operations.

The Sydney Opera House was evacuated following reports of a suspicious package, AAP reported, while the US has also evacuated its Sydney consulate.

The Supreme Court, Sydney Hospital, State Library of NSW, and NSW parliament remains in lockdown.

Jewish institutions across Australia are also taking precautions, according to The Australian Jewish News.

The Lindt Cafe in Melbourne also closed with a sign infomrning customers it would be closed until further notice.

The Commonwealth Bank also announced it closed 10 branches in Sydney’s CBD amid the ongoing siege.

A spokeswoman said customers at the bank’s branch at 48 Martin Place was locked down and customers were safely evacuated, but closed branches elsewhere in the CBD.

Other major banks have also closed their CBD branches, including Westpac, which has closed 12 branches for the rest of the day as a precaution.

ANZ also revealed it was doing the same.

Meanwhile as nearby offices and workplaces have been evacuated, others remain in lockdown.

The Seven Network’s Martin Place studio was evacuated as the hostage drama unfolded.

Seven’s coverage of the siege at the Lindt Chocolat Cafe is being telecast via Melbourne, AAP reported.

The Martin Place studio is Seven’s main newsroom and home to breakfast show Sunrise and The Morning Show, which was on air when news of the siege broke about 9.45am.

The broadcaster issued a tweet revealing all its staff were safe and well.