One killed in Melbourne knife rampage terror attack

Watch: Melbourne police shoots man on a stabbing spree

A knife-wielding attacker killed one person and injured two others in a rush hour stabbing rampage in downtown Melbourne on Friday before he was shot and captured by police.

Footage from the scene shows a man swinging a knife at two uniformed officers near a burning auto before he was shot.

One person died and two others were injured after after being stabbed in Australia's Melbourne.

Clayton said there is no known link to terrorism, but stressed the investigation is still in its early stages.

An explosion is heard on Bourke Street at 4:10pm.

In footage the man in a black t-shirt can be seen ramming the trolley in the direction of the attacker.

Witnesses say they heard one bang or multiple bangs and gunshots in the area, which was subsequently put on lock down.

Police are treating the incident as a terror attack.

"At the same time, passers-by were calling out that members of the public had been stabbed", Clayton told media in Melbourne.

Police later said the auto from which the slain suspect, a Somali national, had emerged, contained gas cylinders and was on fire when they arrived.

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A Victoria Police spokesperson told Broadsheet a man was arrested at the scene and taken to hospital under guard in a critical condition.

One of the officers then shot the man and he collapsed to the ground clutching his chest, the video showed.

However, the police has clearly refuted any links of terrorism with the incident.

As the attacker pursues police across the street and they back away, the man recovers his trolley and follows.

Horror footage shows a vehicle on fire. The bomb response unit was called and the vehicle was rendered safe.

"This is an evil and terrifying thing that happened in our city and state today, and we condemn it", he said.

The police cordoned off the area and warned people from coming near the area.

A fearless bystander dubbed "Trolley Man" has been praised for his selfless actions in his attempt to halt a knife-wielding man who'd stabbed three people in Melbourne's Bourke Street.

The police and State Premier Daniel Andrews asked people to avoid the area.

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