One of two hostages who died in a 16-hour siege at a Sydney cafe in December 2014 was killed by ricocheting fragments of police bullets, an inquest into the deadly stand-off has heard.

Katrina Dawson, 38, a barrister and mother-of-three, died along with Tori Johnson, 34, the cafe manager, and Man Haron Monis, 50, the Iranian-born hostage-taker, when police stormed the cafe in Sydney's financial district in the early hours of December 16.

"Ms Dawson was struck by six fragments of a police bullet or bullets which ricocheted from hard surfaces into her body," Jeremy Gormly, the counsel assisting the coroner's inquest, said on Wednesday.

"I will not detail the damage done to Ms Dawson other than to say that one fragment struck a major blood vessel. She lost consciousness quickly and died shortly afterwards."

The NSW Coroners' Court inquest will outline what happened in the siege, which involved 17 hostages, investigate the police response and delve into the background and motivations of Monis.

A separate investigation commissioned by the federal and New South Wales governments is set to submit a report in the next few days.

The coroner's inquest will review the report's findings.

The stand-off shocked Australians, with thousands laying bouquets at a large makeshift memorial near the Lindt chocolate cafe.

Sawn-off shotgun

Gormly said Johnson was shot in the back of the head by Monis with a sawn-off shotgun just moments after several hostages escaped.

"Johnson was made by Mr Monis to kneel on the floor of the cafe," he said.

"After a short lapse of time, Mr Monis simply shot him without further notice or warning in the back of the head."

"The end of the barrel was about 75cm from Mr Johnson's head at the moment of discharge. Mr Johnson is believed to have died immediately."

Gormly said the shooting was witnessed by a police marksman, which led to the order for police "tactical operatives" to force their way into the cafe.

About 22 shots were fired by the officers after 11 flash bangs were thrown into the cafe, while Monis fired two shots, the hearing was told.

"Bullets and fragments of bullets hit Mr Monis, who was, it seems, killed instantly," Gormly said.

"At least two bullets, police bullets or bullet fragments, hit Mr Monis in the head and 11 other bullets, police bullets or fragments, hit him in the body."

During the stand-off, Monis fired a total of five rounds from his shotgun, which he took into the cafe on December 15 at 8:33am local time.

None of the rounds struck anyone apart from Johnson, "although he appears to have been trying to do so", Gormly said.

No ISIL contact seen

The inquest will look into Monis' claims his actions were an attack on Australia by Islamic State of Iraq and the Levant (ISIL) and whether he had any terrorist associations.

But Gormly noted "at present it seems he had not established any contact" with ISIL.

Australia raised its threat level to high in September and carried out a series of counterterrorism raids following a flow of its nationals into Iraq and Syria to fight with ISIL and other like-minded groups.

Questions raised in the siege's aftermath about why Monis, who had a history of extremism and violence, was free on bail - despite facing various charges including abetting the murder of his ex-wife - will been explored during the inquest.

The hearing was told Coroner Michael Barnes had commissioned an independent review into police handling of the siege.

The review will be undertaken by British police specialising in siege management, supported by experts from other Australian states.

"If there were defects in the management of the siege, they will be exposed," Gormly said.

"But if there were not, a public review of the management and options for any future need is part of the current investigation."

The inquiry is also expected to hear from surviving hostages, and review sound and video recordings, social media postings and phone calls that were made during the stand-off.

Source: AFP