Ibrahim Abu Mohamed, the country's Grand Mufti, released a statement saying the Muslim community was "devastated" by the hostage situation in the Lindt chocolate cafe in Martin Place, where a gunman brandishing what appears to be a black flag has taken up to 50 people hostage.
"The Grand Mufti and the Australian National Imams Council condemn this criminal act unequivocally and reiterate that such actions are denounced in part and in whole in Islam," the statement read, 9news.com.au reported.
Prof Mohamed also offered his and the Muslim community's full solidarity and support for the victims of the siege and their loved ones.
A number of Sydney's Muslim leaders earlier met to offer what help they can to authorities in the face of the unfolding siege in Martin Place in Sydney's CBD.
Australia’s Prime Minister Tony Abbott has refrained from saying the siege is related to fundamentalist terrorism, and the siege is being treated as a criminal matter by NSW Police.
However, Lebanese Muslim Association president Samier Dandan said Australian Muslim leaders were conducting an online meeting to see if the community could help.
If there's something that the Australian Muslim community can do to assist, we are there," he told the ABC.
Arab Council Australia has also released a statement saying they are "horrified" by news of the siege.
"We have full confidence in our police and hope that the situation is resolved without further violence and that the perpetrator or perpetrators face the full force of the law and are brought to justice," the statement read.
The gunman has attempted to issue demands, including contact 2GB radio host Ray Hadley via a hostage and demanding to be put on the air.
Responding to Mr Abbott's statement that the motivation behind the siege was unknown, the gunman said the Prime Minister knew "full well" why this incident was unfolding, Hadley claimed.