A bystander captured on video tackling and disarming an armed man during Sunday's deadly attack at Sydney's Bondi Beach has been hailed as a hero whose actions saved lives.

Footage circulating on social media shows a man, named by local media as 43-year-old fruit shop owner Ahmed al Ahmed, in a car park wearing a white shirt charging at a man in a dark shirt who is holding a rifle.

He then tackles the armed man from behind, wrenching the rifle from him with his hands before pointing the gun back at the man.

The video then shows the man in a dark shirt backing away towards a bridge where another shooter is positioned, while the bystander places the gun down on the ground.

Chris Minns, the premier of New South Wales state, where Sydney is located, hailed the bystander as"a genuine hero" and said the video was "the most unbelievable scene I've ever seen".

"There are many, many people alive tonight as a result of his bravery," Minns added.

One suspected gunman was killed and another was in a critical condition following the shooting at the beach event marking the Jewish holiday of Hanukkah, and police said they were investigating whether a third gunman was involved.

Reuters confirmed the video from verified corroborating footage showing the same men.

Reuters also verified that the armed men in the video are the same as the individuals seen surrounded by the police in verified corroborating visuals by their clothing.

The bystander's identity could not immediately be confirmed by Reuters or FRANCE 24. Local media outlet Seven News identified him and said he had been hospitalised after sustaining two gunshot wounds.

Prime Minister Anthony Albanese praised the actions of Australians who had"run towards danger in order to help others".

"These Australians are heroes and their bravery has saved lives," he told a press conference.

Others took to social media to express their admiration.

"Most people run from danger but this man, present at the Bondi Beach massacre that just took place, was not one of those people," one person said on the X platform.

"This Australian man saved countless lives by stripping the gun off one of the terrorists at Bondi beach. HERO," said another.