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One person has been killed on a central Melbourne street where a knife wielding man was left in a critical condition after being shot by police.

A man has been shot by police after lunging at two uniformed officers with a knife near a burning auto in Melbourne's Bourke Street Mall.

The suspected attacker was shot by the police and was taken to a hospital for treatment.

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

Local media showed footage of a large man slashing wildly at police officers before being shot.

He said: "Three people have been stabbed, unfortunately one of them is deceased at the scene".

"A second person has been taken to hospital with a head injury".

Police shoot a man lunging at them with a knife on Melbourne's Bourke Street.

'The exact circumstances are yet to be determined at this stage.

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The officers then retreated to the other side of the road as the attacker, dressed in a long jacket and grey trousers, ominously pursued them as horrified bystanders called on police to shoot him.

The street where the vehicle caught fire was the scene in January 2017 of a fatal but not terror-related incident in which a man drove his auto at pedestrians at high speed, killing six people and wounding about 30.

"It's so chaotic", witness Sarah told Tom Elliott.

Her immediate thought was, "Oh no, not another Bourke Street incident", she said.

"There was a massive flame and bang, just smoke and lots of people", witness Shelley Reid told Nine News.

Anyone with information or who witnessed the incident is asked to go to Melbourne West Police Station to make a statement.

"People around me screamed that he had a knife but I couldn't see clearly from where I was", Meegan May said.

The incident comes as a trial continues into the horrifying rampage in Bourke St in January previous year.


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