Australian police say several people stabbed in Melbourne; man arrested

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One person was confirmed dead after multiple stabbing incident during rush hour in the Australian city of Melbourne, police said on Friday, as the city was placed on lockdown.

"A man was arrested at the scene and has been taken to hospital under police guard in a critical condition".

Addressing the media, Superintendent David Clayton said that the man who attacked the people was shot in the chest and he is now critically injured.

A man has been arrested and is under police guard in hospital.

Victoria Police Superintendent David Clayton told reporters there are no know links to terrorism.

Ambulance Victoria said three people were injured at the scene, including one person who suffered a neck injury and is in a suspected critical condition.

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

One of them has succumbed to injuries, police said.

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The attacker reportedly torched his auto before the vehicle burst into flames.

Police are asking members of the public to avoid the area. Their genders, ages, and condition are not known.

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

There were large spots of what appears to be blood near the figure, as were a pair of men's black lace-up shoes. They said they heard screams and cries from the crowd before they were rushed from the area.

"Me and the managers ran out and that's when we saw the vehicle on fire and then we saw the guy on the floor and we wanted to help, there were two blokes helping him out already, he was face down pools of blood around his face", he told AAP.

'Police response was swift and overwhelming.

"Police are now at an incident on Bourke St in the CBD. People who'd seen it had told me they heard shots being fired, and everyone heard an explosion that was like the petrol exploding".

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