Bolstered by up to $18 million in extra funding, the inquiry will look at the police response, as well as the killer's interactions with NSW and Queensland agencies.
NSW Premier Chris Minns said he expected the inquiry would provide insight into whether the $2.7 billion spent by the state government on mental health each year - about half the amount spent on the NSW Police Force - was sufficient or being appropriately channelled.
"We have to answer the question as to whether that money is going in the right areas and is being spent most effectively," he told reporters on Saturday.
"I need to do that with evidence and I'm confident that coronial inquiry will help direct the government's policy changes."
(From left) Pikria Darchia, Faraz Tahir, Ashlee Good and Jade Young were killed in the Bondi attack. (HANDOUT/SUPPLIED)
Queensland man Joel Cauchi, 40, a long-time sufferer of mental health problems, was shot dead at the scene by police after carrying out the country's worst mass killing in recent years.
Mr Minns said he had spoken to Muhammad Taha, a security guard stabbed in the stomach while confronting Cauchi.
The Pakistani national was wounded while trying to help his colleague, Faraz Tahir, one of six people killed in the attack.
He remains in hospital recovering from serious injuries.
"We owe them a big debt of gratitude," Mr Minns said.
"He's told me he's taken a lot of heart from the fact that many Australians are behind him and wishing him a speedy recovery."
Mr Taha thanked Prime Minister Anthony Albanese on Friday for granting him permanent residency "for the country I love" in the wake of the attack.
French construction worker Damien Guerot - dubbed "bollard man" after footage showed him holding back the attacker - will also be issued a permanent visa.
Six people remain in hospital, including a nine-month-old baby girl whose mother, Ashlee Good, 38, died from injuries sustained in the attack.
Guards in stab-proof vests are patrolling all floors at the Westfield Bondi Junction centre. (Bianca De Marchi/AAP PHOTOS)
NSW Police continue to probe what motivated Cauchi to carry out the massacre and the likelihood he targeted women, the majority of the victims.
Customers returned to the normally bustling shopping mecca on Saturday, marking exactly a week since Australia's worst mass killing in years.
The centre is operating with an increased police and security presence with guards in stab-proof vests to patrol each floor.
Work Health and Safety Minister Sophie Cotsis said mental health counsellors would remain on site as long as needed.
Psychological health and safety support for businesses with fewer than 200 employees would also be available through a free advice service and mental health training.
A candlelight vigil will be held at Bondi Beach on Sunday evening, with a minute's silence to honour the victims.
Mr Minns said it would be an opportunity for those attending to lean on one another during what had been a terrible week for the city.
"I think if we can stand together during these difficult periods, we can send a message that there's far more good people in this city than there are bad actors and than there is evil," he said.
Mr Faraz, a refugee who fled persecution in his native Pakistan, will be farewelled at a funeral in western Sydney on April 26.
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