Known to most residents along the way, the 59-year-old father-of-two would wave to people or stop for a chat about his beloved Parramatta Eels.

However, on Saturday, someone unexpected was waiting for him.

A resident of Ohlfsen Street said she saw local man Ihsas Khan loitering in a reserve at about ten minutes before 4pm.

She had seen the man before. Days earlier, he had stood outside her home yelling furiously at her in Arabic in what she presumed was a rant against her western attire. He then paced up and down the street with a backpack on.

Other residents had reported strange and threatening behaviour from the 22-year-old, who was once an academically gifted student on the high achievers' list at Hurlstone Agricultural High School but now allegedly suffers from schizophrenia.

On Saturday, just after 4pm when Mr Greenhalgh walked through the reserve, Mr Khan allegedly unleashed a pre-planned yet random stabbing attack inspired by Islamic State.

As Mr Greenhalgh attempted to fight back, he sustained deep cuts to his hands and body.

With a punctured lung and other deep lacerations, he had more than six hours of surgery on Saturday night and was in a serious condition in Liverpool Hospital's Intensive Care Unit.

"Everybody knew Wayne, he would say hello to anyone," local resident Liz Dean said. "He'd never hurt a fly but I'm sure would fight 'til death to protect anyone."

Passersby ran to help Mr Greenhalgh and reported hearing Mr Khan shout "Allah Akbar" as he swung a large hunting knife. He also said he wanted the police to shoot him dead and he wanted to be a martyr, Fairfax Media has been told.

A local resident Sharon, who didn't want her surname published, said Mr Greenhalgh managed to scramble away to the nearby home of Duyen Phan, who runs a salon out of her garage.

She watched in horror as Ms Phan barricaded herself and Mr Greenhalgh inside the salon while Mr Khan allegedly tried to smash his way in through a glass door.

He kept yelling "someone is going to die today", she said.

Neighbours rushed in, some wielding planks of wood. Dramatic photos obtained by Fairfax Media show the moment three police officers had to use Tasers to subdue Mr Khan after he swung his knife at them, allegedly in an attempt to be killed by them.

Shocked that global terrorism had come to their small Minto street, residents were questioning on Sunday how Mr Khan's behaviour had escalated so severely.

Ms Dean said she saw Mr Khan a few days ago at 1am pushing a wheel and axle up and down the road continuously. She said police had been called in recent days.

"He was walking in the middle of the road the day before and would walk in front of cars," she said. "He did this to me and I knew he was on a mission. His behaviour had got so much worse in the past four weeks."

Deputy Commissioner Catherine Burn said Mr Khan was not on a terror watch list but investigators had since found information to suggest he planned to commit an attack on Saturday that was inspired by Islamic State.

"We know that this person has strong extremist beliefs inspired by ISIS," she said. "What made him actually act yesterday we don't know."

It's understood he told police in an interview that he supported Islamic State and believed it was justified to kill people to exact revenge for the deaths of Sunni Muslims.

When police searched his family home on Saturday night, they found an electronic copy of Islamic State's magazine Dabiq and evidence he had been searching for extremist YouTube videos, police sources have told Fairfax Media.

They said that Mr Khan is a hardline religious zealot and has serious mental health issues including schizophrenia.

He has previously posted extremist messages in public forums, including one saying Pakistani doctor Aafia Siddiqui, who is in prison for attempting to murder US officials, should be freed.

"We will never meet Allah on the Day of Judgement without going till [sic] death, torture, slaughter to save our innocent precious Muslimah sister," he posted.