One Dead, Two in Hospital After Stabbing Rampage in Melbourne CBD

An unverified

An unverified

One man charged at the tall attacker, who was wearing a long black shirt, with a shopping trolley just before police drew their weapons.

The man stabbed three people, killing one, before he was shot by police.

Melbourne is Australia's second-largest city and known for its thriving restaurant and cafe scene.

Police responded to the scene on Bourke Street after receiving reports of a auto on fire, Victoria Police Superintendent David Clayton told reporters shortly after the incident. He had placed several barbecue gas canisters in the back of his pickup, with the outlet valves open, but they had failed to ignite.

"From what we know of that individual we are treating this as a terrorism incident", Ashton told reporters, adding that the police counterterrorism command was working on the case, as well as homicide detectives. He moved to Australia in the '90s from Somalia, and had a record of "minor" offenses, including marijuana use, some driving offenses and theft.

Police quickly arrived on the scene, Ashton said.

A Somalian man went on a knife rampage in central Melbourne today, stabbing three people after setting a auto full of explosives on fire. Some cordons were lifted later, though the immediate crime scene would be sealed until Saturday, police said.

He died later in hospital. He has since been transported to the hospital under police guard and is in a critical condition.

Once at the scene police say the man who emerged from the auto attacked officers, before members of the public alerted them to several people who had been stabbed.

He brandished a knife and stabbed three men, one of whom, who has yet to be identified, later died in hospital.

One person was killed in the attack and two others were injured.

Search warrants are being executed on two homes in Melbourne's west, which 9NEWS believes is linked to yesterday's Bourke Street terror attack.

The text was referring to a call in August by Islamic State leader Abu Bakr al-Baghdadi to "use bombs, knives or cars to carry out attacks" in countries taking part in the US -led coalition that put an end to the caliphate he declared in 2014 over parts of Iraq and Syria.

The ute bursting into flames on Bourke Street.

Footages of the incident showed police struggling for at least a minute to contain a man wearing a dark tunic as he lunged, slashed and stabbed wildly at two officers.

Victoria state premier Daniel Andrews said the attack was "an evil and terrifying thing that has happened in our city and state today".

Islamic State had claimed responsibility for the attack, which came two days before Remembrance Day, marking 100 years since the end of World War One, without providing any evidence.

In 2017, another deadly incident occured on the same street after James Gargasoulas drove his auto into pedestrians, killing six.