The storm, which has been pounding Sydney and other parts of New South Wales state since yesterday, has dumped more than 30 centimeters (a foot) of rain in some areas, with wind gusts more than 100 kilometers (60 miles) per hour.
People were trapped in cars and homes and stuck on rooftops amid flash flooding. Emergency officials received 4,500 calls for help and rescued nearly 50 people from floodwaters, New South Wales premier Mike Baird said.
"It looks very much like we have lost three residents," Baird said. "They were elderly residents. At the moment, the circumstances are being worked through, but we do want their families to know our thoughts and prayers are with them."
The wind knocked out power lines, peeled off roofs and sent trees crashing into houses, leaving about 200,000 homes and businesses without electricity. Trash cans were overflowing with battered umbrellas in downtown Sydney, where people staggered against the erratic gusts and navigated pond-sized puddles.
The weather was expected to worsen later Tuesday before finally easing Wednesday.