Bourke Street stabbing: One dead, man arrested in Melbourne

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Police have since confirmed three people were stabbed, one fatally.

Shortly after 5.20pm, a body is seen lying under a white sheet on Bourke Street, near the entrance to Russell Place.

Police are telling all members of the public to avoid the CBD, although dozens of witnesses are being interviewed by officers at the scene.

The bystander's heroic actions were praised on social media.

"The cops were trying to hit him with batons and he wasn't going down", he said.

Unconfirmed reports at the scene claim a man with a knife is involved. "They are in a suspected critical condition", they said.

He sprung back into action and charged back towards the attacker, shoving the trolley back in his direction as police opened fire.

Police shot the man in the chest after he charged at them with the knife.

A man with a shopping trolley has been praised for trying to subdue a knife-wielding attacker who had just stabbed three people in Melbourne. He was quickly arrested on the pavement by two officers.

Victoria Police responded to a major incident on Friday afternoon on Bourke Street in Melbourne, Australia.

"As (officers) got out of the auto they were confronted by a male brandishing a knife and threatening them", Victoria Police Supt David Clayton said.

'Police are not looking for anyone further at this early stage.

"Three people have been stabbed".

"The exact circumstances are yet to be determined". And that the area has been cordoned off.

The bomb squad is on the scene. Police response was swift and overwhelming.

"I heard a massive explosion, the vehicle is completely alight".

They heard screams and cries from the crowd before they were rushed from the area. Some witnesses said the vehicle exploded before the man began stabbing people.

Panicked pedestrians ran in all directions away from the scene, some hiding in nearby cafes and shops, locking themselves in back rooms.

"I could see a big ute on fire driving across the road".

The message over the loudspeakers says: "This is Victoria Police, please evacuate the area".

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

James Gargasoulas is accused of deliberately driving his auto into pedestrians on Bourke Street, hitting 33 people.