Malcolm Turnbull has demanded to know why Brighton gunman Yacqub Khayre was on parole, saying it raises "very, very grave questions" after he was shot dead following a deadly siege in Melbourne yesterday.

"How was this man on parole?" Mr Turnbull said at a media conference Tuesday morning.

"He had a long record of violence — a very long record of violence. He had been charged with a terror offence and acquitted, known to have connections, at least in the past, with violent extremists. He was a known violent offender."

The Prime Minister said he would raise the issue of parole as a very high priority when he met with state and territory leaders on Friday.

Mr Turnbull said he had spoken last night and again this morning to Victorian Premier Daniel Andrews.

He said the issue of parole had been raised before and it had to be addressed.

"My government has taken the lead in keeping Australians safe," he said.

"It is clear that this is a real issue where people with known records of violence, including people with known terrorist connections, or at least connections with extremists, have been released on parole."

Mr Andrews said earlier this morning the gunman had served a significant jail term.

The Victorian Premier said Khayre's eligibility for parole had been delayed because his sentence was increased because of poor behaviour.

"This is the advice I have — terrible behaviour in prison," Mr Andrews said.

A police car blocked the road around the Brighton area as investigations continued. ( ABC News: Patrick Rocca )

But the Premier said Khayre had since been compliant, including drug tests, attending appointments and observing a curfew.

"That's the information that I have to this point," he said.

Mr Andrews said the terrorist act would be reviewed and any improvements that were identified would be made.

And he defended his state's parole laws as the toughest in the nation.

"We have about 800 fewer people out on parole since the review was completed. We have the toughest parole review system anywhere in Australia. That's a good thing," he said.

"Of course it is of concern to all of us that someone who would be compliant with each and every term and provision of the parole they had been granted and were eligible for, could commit such a crime."

In the Victorian Parliament, Opposition leader Matthew Guy went on the attack during Question Time, demanding to know why Khayre was on parole.

"Under your watch, what is it that a criminal has to do to be denied parole in the state of Victoria?" he said.

"Premier, why was this man on our streets?"

Specialist police were at the apartment block in Bay Street. ( ABC News )

Mr Andrews accused the Opposition of political point-scoring at a time when police were still establishing all of the facts, but vowed to implement any changes recommended by police.

"Playing politics with terrorism does nothing to keep Victorians safe," he said.

"If there are any learnings from this act of terror, then the Government stands ready to make those changes."

Victoria's Corrections Minister Gayle Tierney said up to 22 criminals currently in custody or on parole have known terrorist links.

Speaking in the Upper House under questioning from the Opposition, Ms Tierney said the offenders were taking part in an deradicalisation program run by the Islamic Council of Victoria.

She did not provide a breakdown of how many are in prison and how many are living in the community.

She has had a preliminary briefing about Khayre but would not disclose the details.

"I have asked for all of this information to be included into a report for me so that we can have proper and fulsome discussion within the community," she said.