Four other children were rescued from the home and treated at the scene by paramedics.
The incident is being treated by police as a domestic-related multiple homicide.
Homicide Squad Detective Superintendent Danny Doherty said it appeared the father was responsible for the “terrible and tragic” deaths of the children.
“There were direct actions taken ... that were intentional of keeping police, other first responders and neighbours out of the property while it was on fire,” he told reporters.
“We’re alleging that this man did certain actions to prevent the rescue of those young lives.”
“(Police) will allege that this 28-year-old man ‘s actions were linked directly to the cause of the death of these three young people,” he said.
The man is in a coma in an intensive care unit, being treated for smoke inhalation and burns.
10-month old girl believed to have died in blaze
Two boys, aged two and four, were rescued from the burning home and taken to Westmead Hospital in a critical condition but died a short time later.
The body of the third child, believed to be a 10-month-old girl, was found after firefighters extinguished the blaze.
Four other children were rescued from the home and treated at the scene by paramedics.
The incident is being treated by police as a domestic-related multiple homicide.
Homicide Squad Detective Superintendent Danny Doherty said it appeared the father was responsible for the “terrible and tragic” deaths of the children.
“There were direct actions taken ... that were intentional of keeping police, other first responders and neighbours out of the property while it was on fire,” he told reporters.
“We’re alleging that this man did certain actions to prevent the rescue of those young lives.”
“(Police) will allege that this 28-year-old man ‘s actions were linked directly to the cause of the death of these three young people,” he said.
The man is in a coma in an intensive care unit, being treated for smoke inhalation and burns.
Father in coma, allegedly ‘directly linked to deaths’
Acting Superintendent Jason Pietruszka said heroic neighbours and police officers tried to enter the burning building and suffered minor injuries as a result.
Those efforts were the reasons four children and their mother were able to escape, he said.
“It’s completely and utterly devastating for people who know the family, that go to school with the other children - its a close knit community and this will have a long lasting impact,” he said.
A girl, nine, and three boys aged six, seven and 11 were taken to Westmead Hospital in stable conditions.
Their 29-year-old mother was also taken to hospital suffering smoke inhalation and is also sedated.
Mr Pietruszka was unable to confirm reports that the man was armed while trying to stop others from entering the property, but said it would be probed as part of the investigation over coming days.
A dog trained to detect accelerants would be used at the scene to help crews piece together what was used to start the blaze.