Tony Abbott laid a white floral bouquet at the memorial in Martin Place while his wife Margie laid a bouquet of red flowers. Mr Abbott also wrote a message and waved at the crowd but did not address them.
Hundreds of people have been leaving flowers at the memorial.
Seventeen people were held hostage at the Lindt Chocolat Café. The siege ended 16 hours later in a barrage of shots that left two hostages and Iranian-born gunman Man Horan Monis, 50, dead, and a nation that has long prided itself on its peace rocked to its core.
As the stand-off that started at around 9.45am stretched through the day into nightfall with no apparent solution in sight, police stormed the café at about 2am when they heard gunfire inside, said New South Wales Police commissioner Andrew Scipione.
“They made the call because they believed that at that time, if they did not enter, there would have been many more lives lost,” he said.
A loud bang rang out, several hostages ran from the building and police swooped in amid heavy gunfire, shouts and flashes. A police bomb disposal robot was also sent into the building, but no explosives were found.
Monis had “a long history of violent crime, infatuation with extremism and mental instability”, Mr Abbott said.
After a day of intense drama, a host of questions remained: Why was the gunman, a self-styled Muslim cleric with a sordid criminal history, let out on bail and how did he get hold of a shotgun in a country that bans gun sales?
The siege heightened fears of a terror attack, but it also produced heart-rending displays of solidarity among Australians who reached out to their Muslim compatriots.
“I’ll never forget this day as long as I live,” said Jenny Borovina, who was in tears with two friends carrying white flowers to the site. The effect of the stand-off would leave a permanent scar on Australia’s psyche, she predicted, saying: “Our laid-back nature has just changed.”
Like so many who work in the area, Ms Borovina said she was locked down in her office near the café for more than four hours before police gave her the all-clear to leave. During that time, she said, she called her son to say take care. She also called her aunt, asking her to look after her son if she did not make it out alive.
“Australia was a really safe place before,” said Andrea Wang, who laid a bouquet of lilies at the site, near her office.
“I hope our country gets through this very quickly,” she said, adding that her family from China had been calling. “They worry about me in this country.”
National flags were lowered to half-mast on the landmark Harbour Bridge as Australians woke to the surreal conclusion of the crisis. The state’s premier, Mike Baird, expressed disbelief that the attack could happen in Australia – a place he dubbed “a peaceful, harmonious society which is the envy of the world”.
Mr Abbott said Monis was “a deeply disturbed individual’ known to police but was not on a terror watchlist.
“There is nothing more Australian than dropping in at the local café for a morning coffee,” Mr Abbott said.
“And it’s tragic beyond words that people going about their everyday business should have been caught up in such a horrific incident.”