One dead, two hurt in Melbourne terror attack

Police first responded to reports of a vehicle on fire in the Melbourne's crowded Bourke Street, when they encountered the suspect who was attacking bystanders.

Supt Clayton told reporters that when officers got out of the auto, they were confronted by a male brandishing a knife and threatening them.

A SUSPECT has been SHOT DEAD after Terror Attack Melbourne, Australia which left one person dead and two injured.

Police said the driver got out of the vehicle, which then caught fire, and attacked three bystanders with a knife.

"There is no known link to terrorism at this stage", Clayton said.

Speaking to the media on Friday night, Chief Commissioner Graham Ashton said in light of Friday's incident, he had asked police to re-formulate public safety plans for Stakes Day at Flemington Racecourse, football at AAMI Park and Remembrance Day on Sunday. He also died from his gunshot wound in hospital.

Supt Clayton said authorities were not looking for any other offenders.

Prime Minister Scott Morrison said on Twitter that he condemned the "evil and cowardly attack" and praised the bravery of the police.

A second person suffered a head injury and has been taken to hospital.

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Cops say a Somalian immigrant, Mohamed Khalif - who goes by the name of Hassan Shire - crashed his truck on a busy street, hitting a pedestrian and then tried to set the truck on fire.

Witnesses reported a loud explosion from the vehicle, which burst into flames before a man emerged and began attacking people with a knife in the street, police said.

The unnamed assailant, who came to Australia from Somalia in the 1990s, was known to both state police and federal intelligence agencies.

Twitter user Meegan May wrote: "Guy seems to have set his auto on fire, then attacked police with a knife".

Two survivors were rushed to hospital for treatment - one in a suspected critical condition. One of the victims died from his injuries.

They said they heard screams and cries from the crowd before they were rushed from the area.

"We ask the public, unless you've got a objective to be here, please avoid the area, we'll provide regular updates through the media in relation to when the area is safe and clear", he said.

A driver who rammed into pedestrians at a mall close to Friday's incident killed at least four people in January of a year ago.

Islamic State has claimed responsibility for the attack.

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