The Muslim community should not be blamed or vilified for the actions of a 15-year-old boy who executed a NSW Police employee in "cold blood" in Sydney's west, Prime Minister Malcolm Turnbull said on Saturday.

Mr Turnbull has labelled the shooting outside the NSW Police headquarters in Parramatta as "an act of terrorism".

"This appears to have been an act of politically-motivated violence so at this stage it appears to have been an act of terrorism," Mr Turnbull told reporters in Melbourne.

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