The shooting took place in one of the city's western suburbs early on Sunday evening, local time. A perpetrator shot indiscriminately at passing vehicles and police cars, according to the police.
It may have fired between 50 and 100 shots, says Stephen Parry, acting police chief in the state of New South Wales.
A man who took himself to hospital is seriously injured, according to the police. An additional 19 people are being treated for shrapnel injuries and several have been taken to hospital.
Two hours after the shooting, the police arrested a man in his 60s who is suspected of the deed.
Mass shootings are relatively rare in Australia.
