Australian authorities have confirmed that the shooting at Sydney's Bondi Beach on Sunday was a terrorist attack.

Speaking at a news conference on Sunday evening, Prime Minister Anthony Albanese described the incident as "a devastating terrorist incident" that occurred at the Hanukkah by the Sea celebration.

"This is a targeted attack on Jewish Australians on the first day of Hanukkah, which should be a day of joy, a celebration of faith," he said.

Albanese said the attack is "an act of evil antisemitism, terrorism, that has struck the heart of our nation".