Singapore Prime Minister Lee Hsien Loong says he is saddened by the loss of innocent lives in the Sydney hostage taking incident.

"Despite all our precautions, we can never completely rule out such an incident here. If it ever happens, we need the cohesion and resilience to deal with it calmly and as one united people, and not let it divide or destroy our society," Mr Lee said in a Facebook post.

"I had just held a briefing and dialogue with our community and religious leaders on extremist terrorism last month. We talked about how it remained a live threat to us, and in particular the danger of self-radicalisation," he wrote in the post.

He adds that the incident teaches Singaporeans not to let their guard down.

The gunman behind the 16-hour siege at the Lindt Chocolate Cafe and two hostages were killed as heavily armed police stormed the cafe late Monday.