Chilling footage has emerged showing the final moments of a 'radicalised' 15-year-old after he stormed a police headquarters and shot an accountant at point-blank range in an 'act of terrorism'.

Schoolboy Farhad Jabar Khalil Mohammad can been seen running down the street brandishing his gun in the air just seconds after killing father-of-two Curtis Cheng, 58.

Dressed in a black robe, the lone gunman can be heard screaming at officers before having a shoot-out with three special constables guarding the station in Parramatta, Sydney.

Multiple shots can be heard and the Channel Seven video then shows the Iranian-born youth, who is reported to be a Sunni Muslim, lying on the ground in a pool of his own blood.

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Chilling footage has emerged showing the final moments of 'radicalised' 15-year-old Farhad Jabar Khalil Mohammad after he stormed a police headquarters, pictured in a shoot-out with police constables

The exchange of gunfire occurred yesterday afternoon just metres away from the Goodstart Early Learning Centre where young children could be seen playing behind a wall.

Farhad was reportedly able to walk unchallenged into the police headquarters and choose his victim.

The 15-year-old first came across a plain clothes female detective who was not carrying a gun, according to reports.

But he then shot Mr Cheng in the back on the head as the veteran of the police finance department was leaving work.

Witnesses have described seeing the teenagers dancing joyously after shooting the 'gentle' public servant while shouting 'Allah, Allah'.

The 15-year-old continued to fire his handgun outside the police building until he was killed in a shoot out with three special constables.

He reportedly visited a mosque where he changed into a black robe just before the killing which has been condemned as a 'brutal' and 'callous murder'.

Farhad, who is of Iraqi-Kurdish background, is understood to have been living with his family in an apartment block in North Parramatta.

It has emerged that his sister Shadi may have been attempting to reach Iraq or Syria the day before the shooting as she flew out of Australia on a flight bound for Istanbul on Thursday.

She reportedly took all her belongings with her, according to the ABC.

Police said Farhad teenager was not on their radar, but revealed that his relative was known to law enforcement or intelligence agencies.

'[The relative] was a bit of a problem, he did come to the attention of police and counter-terrorism [authorities],' a source told ABC.

Farhad can been seen running down the street brandishing his gun in the air just seconds after killing father-of-two Curtis Cheng, 58

Dressed in a black robe, the lone gunman can be heard screaming at officers outside the station

He then engages in a shoot-out with three special constables guarding the station in Parramatta, Sydney

The gunman and one of the special constables can be seen firing several shots at each other in broad daylight

Multiple shots can be heard and the video then shows Farhad lying on the ground in a pool of his own blood surrounded by officers

The 15-year-old's brother contacted police following the attack and has spoken extensively to detectives.

Farhad is believed to be a student at Arthur Phillip High, which is just 300m from where the double shooting took place.

Officers searched the teenager's North Parramatta family home on Friday and took his computer equipment.

But they revealed they had not yet discovered any messages, religious writings or notes left by Farhad.

Farhad (pictured) was reportedly able to walk unchallenged into the police headquarters and choose his victim

Police Commissioner Andrew Scipione confirmed the teenager's actions were 'politically motivated and therefore linked to terrorism'.

But he admitted they were still unsure of the schoolboy's 'exact motivations'.

'We're a long way from establishing a full picture of this man, his exact motivations still remain a mystery to us,' he said.

Detectives have described the shooting as a 'targeted attack', but they are unsure why Farhad chose the civilian officer 'who never had a badge'.

'We are not sure whether he was targeted because he came from a police facility — we may never know. But he was certainly targeted in terms of the shooting,' Commissioner Scipione said.

'It was a direct shooting.

'Certainly it wasn't a ricochet, it was a targeted shot that took his life.'

At this early stage of the investigation, Mr Scipione says they have no information to link the boy to a specific group.

'There is nothing to suggest that he was doing anything but acting alone,' he said.

But police will also look into whether Farhad may have been on the fringe of an extremist group that had already come to the notice of police.

The commissioner also paid tribute to the three special constables who put their lives on the line to gun down the shooter.

'I don't think I've seen greater acts of bravery than I saw last night,' Mr Scipione said during a press conference today.

'Those special constables certainly put their lives on the line, knowing that they were under fire, probably aware that somebody had been shot.'

Slain police employee Curtis Cheng (far left) with his family, who police have declined to name

The exchange of gunfire occurred yesterday afternoon just metres away from the Goodstart Early Learning Centre where young children could be seen playing behind a wall

The Iranian-born youth reportedly visited a mosque in the hours before the killing which has been condemned as a 'brutal' and 'callous murder'

The two bodies were found just metres apart on the pavement outside the police station and children's day care centre

Farhad is understood to have started firing shots at the building at 4.30pm from the Charles Street sidewalk, which was heavily populated at the time.

The Prime Minister has also highly praised the actions of the responding officers.

'I also want to praise the swift action of the special constables of NSW Police who brought that terrorist incident to a close,' said Malcolm Turnbull.

'Only last week we observed Police Remembrance Day. We must never forget that our security, safety, indeed our democracy depends on the vigilance, professionalism, and courage of our police and security agencies, who every day are putting their lives and safety on the line to keep us safe.'

Mr Turnbull confirmed it is understood to have been an act of terror targeting NSW Police force.

'Now as Mr Scipione has said, this appears to have been an act of politically motivated violence so at this stage it appears to have been an act of terrorism,' he said.

'It is a shocking crime. It was a cold-blooded murder, targeting the NSW Police Service.'