The three people were seen on live video footage bolting out of the door past heavily armed police and then disappearing around a corner.
The development came six hours after a gunman entered the Lindt Chocolat Cafe in Martin Place, a plaza in the heart of the city's financial and shopping district that is packed with holiday shoppers this time of year. Many of those inside the cafe would have been taken hostage as they stopped in for their morning coffees.
New South Wales state Police Commissioner Andrew Scipione said police did not know the gunman's motivation and were not sure how many people were being held inside.
“We have not yet confirmed it is a terrorism-related event,” Scipione said. “We're dealing with a hostage situation with an armed offender and we are dealing with it accordingly.” Burn said that police negotiators have made contact with the gunman.