Sisto Malaspina, a doyen of Melbourne's thriving cafe culture, was stabbed to death in the attack.
Hollywood superstar Russell Crowe led tributes Saturday to "true gentleman" 74-year-old Sisto Malaspina, a doyen of Melbourne's thriving cafe culture who was stabbed to death in Friday's rush hour terror attack.
As crowds gathered at Malaspina's "Pellegrini" cafe to lay flowers and tokens of remembrance, Australian acting legend Crowe led a flood of tributes online.
"Il mio cuore si spezza" (my heart is broken) he wrote on Twitter in Malaspina's native Italian.
"I've been going to Pellegrini's since 1987. Never been to Melbourne without dropping in on my man Sisto… My sweet loyal friend, stabbed in the street by a mad man."
Melbourne is Australia's second largest city, a thriving cosmopolitan metropolis of almost five million people famed for its cafes, bars, restaurants and high standard of living.
Opposition leader Bill Shorten, who is from the city and has been visiting Malaspina's cafe since his schoolboy days, described the murder of Melbourne's adopted son as "shocking, unreal and heartbreaking."
"I just saw Sisto on Monday morning. He insisted I try a slice of his almond cake. He's a Melbourne icon and a true gentleman."
Two other men wounded in the attack are still being treated and are expected to make a recovery.
It was another foreign-born resident of the city, Somali-born Australian, Hassan Khalif Shire Ali, who carried out the deadly knife rampage.
The 30-year-old fled with his family from war-ravaged Somali to Australia as a child in the 1980s.
He was killed on Friday afternoon after driving a 4×4 laden with gas cylinders into the city centre and stabbing three passersby before being confronted by members of the public and armed officers who eventually shot him in the chest.
Unconfirmed local media reports suggested he may also have had problems with substance abuse and mental health issues.
But he was known by intelligence services to hold extremist views and for now the authorities are treating the attack as a terrorist incident.
They have questioned around 35 people who saw the daytime attack, which although crude, was said to have been designed to "cause terror and cause maximum casualties" in the heart of Melbourne.
Armed officers raided two addresses in the west and northeast of the city, linked to the perpetrator's family and associates, although there is not thought to be an ongoing threat.
Australian authorities now face difficult questions about how Shire Ali, who was known to the Australian Security Intelligence Organisation for at least three years, was able to carry out an attack.
He had his Australian passport revoked in 2015 amid fears he was trying to travel to Syria to join the Islamic State (IS) group.
His brother will go on trial next year on separate terror-related charges — accused of trying to acquire a firearm and kill people in a New Years' Eve crowd.
"The assessment was made that whilst he had radicalised views he didn't pose a threat to the national security environment," Ian Mccartney, a federal police counterterrorism official said of Shire Ali.
Mccartney described the attack as a "wake up call" even as IS loses territory in Iraq and Syria, where Australian forces are part of a coalition fighting the group.
"The circumstances of how he and when he moved from having these radicalised views to carrying out this attack yesterday will be a key focus of the investigation," Mccartney added.
IS — which often claims responsibility for such attacks — said via its propaganda arm that the perpetrator was an "Islamic State fighter and carried out the operation."
It provided no evidence to back its claim.
Witness Chris Newport, 60, who also moved to Melbourne decades ago from overseas, described how he had been returning from a job interview when he heard a loud noise and saw a truck on fire, rolling across the tram tracks before a second, louder bang.
Police said that Shire Ali's improvised explosive device was made up of gas cylinders and some form of lighter and "certainly wasn't sophisticated".
"In a split second everything changes" Newport told news agency AFP, describing Shire Ali manically brandishing a knife. "You can't imagine someone deciding to do that."
Police struggled for at least a minute to corral the towering man as he lunged, slashed and stabbed wildly at two officers.
At least two members of the public stepped in to help police. One man was armed with a cafe chair while another — swiftly dubbed an "Aussie hero" on social media — repeatedly tried to ram the suspect with an empty metal shopping cart.
Australian Prime Minister Scott Morrison said the country would be unflinching in the fight against "radical, violent… extremist Islam that opposes our very way of life".
Shire Ali "sought to instil fear in our nation. Like those who tried before him, this terrorist failed," he said.
He cited more than a dozen foiled terror plots as evidence that Australians could have faith in their counterterrorism authorities.
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