The NSW Police have activated Task Force Pioneer, meaning the hostage situation in Sydney's Martin Place is seen as a terrorist attack against the city.

Deputy Commissioner Catherine Burn announced the taskforce had been activated just before 4pm on Monday. It is not the first time Pioneer has been used but police would not say when, and where, it had been activated previously.

Task Force Pioneer is headed up by Assistant Commissioner Mark Murdoch. Mr Murdoch is the force's counter-terrorism boss. He is also the man who oversaw the lengthy siege-style situation at Mosman in 2011 when a suspected collar-bomb was placed on teenager Madeline Pulver.