Australia will hold a Royal Commission of Inquiry, the country's most powerful level of public inquiry, into the Bondi Beach mass shooting in which 15 people were killed, Prime Minister Anthony Albanese said on Thursday.

The mass shooting at a Jewish Hanukkah celebration at Sydney's famed Bondi Beach on December 14 shocked a country with strict gun laws and fuelled calls for tougher controls and stronger action against antisemitism.

Police say the ‍alleged father and son perpetrators were inspired by the Islamic ⁠State militant group.

Albanese said the Royal Commission, a government inquiry which can ‍compel people to give evidence, will be led by retired judge Virginia Bell.

It will consider the events of the shooting as well as antisemitism and social cohesion in Australia, and is expected to report its findings by December ‌this year.

"This Royal Commission is the right format, the right duration and the right terms of ‍reference to deliver the right outcome for our ‌national unity and our national ‌security," Albanese said.

Albanese had initially resisted calls to set up a Royal Commission, saying the process would take years, which attracted criticism from Jewish groups ⁠and victims' families who urged him to reconsider.

"I've taken the time to reflect, to meet with leaders in the Jewish community, and most importantly, I've met with many of the families of victims and survivors of that ‌horrific attack," he said.

The government last month announced an independent ‍review into law enforcement agencies that was to assess whether authorities could have taken additional steps to prevent the attack.

That review, which will examine whether existing laws or information gaps stopped police and security agencies from acting against the alleged attackers, will now be folded into the ‌Royal Commission, Albanese said. It ⁠is expected to report its findings in April. (Reuters)