Speaking to the media last night after the deadly incident, NT Police Commissioner Reece Kershaw told reporters the 45-year-old suspect had spent more than a year in jail and was wearing an electronic monitoring bracelet at the time of his arrest.
Witnesses reported hearing up to 20 shots fired at the motel, telling horrifying stories of the man allegedly calmly walking through the motel "looking for somebody".
He was on the loose for about an hour before he was eventually arrested, tackled by heavily armed tactical police at a city roundabout shortly before 7pm.
"The active shooter threat has dissipated", Northern Territory Police Superintendent Gavin Kennedy told the AFP news agency after the arrest, adding that officers were investigating at least five crime scenes throughout the city.
The city center was locked down for an hour after the gunman fled the scene of the shootings.
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Kershaw confirmed that the gunman had used a pump-action 12-gauge shotgun - a prohibited firearm - that may have been stolen as far back as 1997.
More recently, a man was killed and three others wounded in a shooting outside a popular nightclub in Melbourne in April.
The shotgun-wielding man walked into a motel and started shooting at multiple doors, apparently looking for someone called "Alex", according to a witnesses cited by national broadcaster ABC.
Another crime scene is the Peter Macauley Centre, which is NT Police headquarters in the outer Darwin suburb of Berrimah. "He's a local Darwin lad that all of us know".
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Police said at least some of the victims may not have known the gunman.
Local Matthew James helped patch up a woman who had been shot in the leg near the Palms.
Australian Prime Minister Scott Morrison tweeted that the incident was not an "act of terrorism".
"People were rushing past me saying someone had just been shooting up the Palms Hotel", he said.
"I ran and got some towels and wrapped up her legs, she had little holes all in her skin on both her legs and she was bleeding everywhere".
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