Melburnians are grieving for Sisto Malaspina, the co-owner of beloved Melbourne restaurant Pellegrini's Espresso Bar, who has been identified as the man killed in Friday's Bourke Street attack.

Mr Malaspina was fatally stabbed by Hassan Khalif Shire Ali on Bourke Street on Friday afternoon before police shot Ali, who subsequently died at the Alfred Hospital.

Pellegrini’s is closed for business as staff and regular customers pay tribute, with chaplains comforting mourners both inside the cafe and as they arrive at the Melbourne institution which first opened its doors 60 years ago and is credited with kickstarting this city's cafe culture.

A floral tribute to Mr Malaspina, who took over the restaurant with his business partner Nino Pangrazio in 1974, adorns the front window of the famous restaurant as staff and regulars stopped to pay their respects.

A visibly upset Mr Pangrazio said he was shocked by the death of his long-time business partner and friend.

“I feel terrible. We’ve been business partners since 1974 and we were friends for 10 years before that.”

“He was just so happy go lucky and always with a smile. We hardly had a cross word in the whole time we worked together. Just devastated.”

"He was a wonderful partner... and the staff just cannot believe it. Many, many tears have been shed."

Mr Pangrazio said he was informed of his business partner's death late last night after receiving a call from a staff member.

Mr Pangrazio and Mr Malaspina, who had just become a new grandfather, had worked together at the restaurant just hours earlier.

"I left about 3 o'clock to go home for the week and then one of the staff rang me to ask had I seen Sisto. I thought he was there but obviously he wasn't and then I got a call around 10.30 to say the police had been in touch with the devastating news."

Mr Pangrazio said his loss was already being felt by the wider Melbourne community.

"As you can see with all the people around here, there have been literally hundreds of poeple stopping by since about 7.30 this morning," he said.

"He was always a happy fellow and that's what people are remembering... his happiness and his friendliness and his smile. "

Mr Pangrazio attributed his partner's "big personality" to much of the success of the business.

"His personality was right out in the forefront. People loved him and the business just seemed to grow every year. He will be missed by a lot of people."

Last year Mr Malaspina spoke to Hospitality magazine about his beloved restaurant.

“It hasn’t changed at all. It’s still the same menu, prepared in the same way. Slow cooking, no machinery, done by hand … This is the way food should be done. It’s not contemporary food. It’s secular, traditional, home cooking.”

During that interview he was asked what the next fifty years of Pellegrini's would look like.

“Had you asked me the same question 20 years ago, I would have answered differently because I thought I was invincible, but as I grow older I realise that I’m not immortal and I’m not invincible,” he said.