From the PaperPino Site:
This is one of the simplest machines designed by Leonardo in order to improve the human performance. A lever connected to the hammer is moved by means of an eccentric cam. At each turn of the handle, the hammer gives a stroke. As a matter of fact, the real hammer is supposed to be powered by a water paddle-wheel. An implementation with a paddle-wheel powered by sand is planned for the next future.
Check out Leonardo's Mechanical Hammer paper model.