A man has killed one person and wounded two others in a knife rampage in Melbourne that police are treating as a terror attack.
A man has been arrested after stabbing three people and setting fire to a auto in Australia.
Police had been called to the auto at 4.20pm Friday, local time, by which time the man had already started attacking bystanders.
The suspect has been "known to police mainly in respect to relatives he has that are certainly persons of interest to us", Ashton said.
The journalist also said an emergency speaker system was warning people to avoid the area. "The area has been cordoned off", police said.
He stabbed three people before being confronted by armed officers who eventually shot him in the chest. A man was arrested at the scene and has been taken to hospital under police guard in a critical condition.
Another witness on a passing tram told ABC Radio it seemed police had been trying to subdue a man who was waving something.
Victoria Police said that the attack in the Melbourne CBD is now being treated as a terrorism incident.
Witnesses say they saw the man drive a truck into the Target centre and as the vehicle caught fire he tried to fight and stab police and bystanders.
The man then follows the attacker as he continues down the street with police around him, once again pushing his trolley towards the group.More news: Charlotte Woman Who Harassed Black Neighbors Turns Herself In To Police
More news: 'Faulty mechanical equipment' to blame for active shooter reports at Topsail High
More news: VW premieres compact double cab
The suspect, who wasn't immediately identified, was shot by police and later died at a hospital.
Only after he was shot did police realize that three members of the public, all men, had been stabbed. One of the victims died from his injuries.
Police spokesman Superintendent David Clayton has told reporters there are no known links to terrorism at this time.
The unnamed assailant was said to reside in Melbourne's northwestern suburbs, but had come to Australia from Somalia in or around the 1990s, when the country was ravaged by a civil war. "They are in a suspected critical condition", they said.
"This is an evil and terrifying thing that has happened", Victoria State Premier Daniel Andrews said alongside Ashton.
"There was a massive flame and bang, just smoke and lots of people", witness Shelley Reid told Nine News.
"I kept watching", said witness Tony Nguyen, after what he described as a "car bomb".
Police initially responded to reports of a vehicle on fire at the corner of Bourke and Swanston streets.
Anyone with information is being asked to make a statement at the West Melbourne Police Station.