One Dead, Two in Hospital After Stabbing Rampage in Melbourne CBD

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A man has been shot by police after he stabbed three people and set a auto on fire in Melbourne's CBD, Victoria Police said at a press conference on November 9.

Victoria state police Commissioner Graham Ashton says the attacker was from Somalia and known to the authorities, mostly because of family members who were "persons of interest" to police.

Footage from the scene show a man making stabbing gestures at two uniformed officers near a burning auto before he was shot.

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

Chief Commissioner Graham Ashton says the Somalian-born Shire Ali was the brother of a man arrested by police late previous year in relation to committing acts in preparation for a terrorist attack.

Authorities are treating the attack as a terrorism incident, Ashton said.

Mr Ashton said police were "doing security reassessments of these events in light of what's occurred", but there was "no ongoing threat we're now aware of in relation to people surrounding this individual". Any witnesses who caught footage of the incident are also asked to upload their files to the Victoria Police Facebook page.

The suspect was shot in the chest by police, Clayton said.

Police said the attacker's vehicle contained several barbecue gas cylinders in the back.

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"One person has been taken to hospital with a neck injury".

State police Superintendent David Clayton said police responded to reports of a burning vehicle. The man, who was shot in the chest by police, was in critical condition.

"Someone had a shopping trolley and was trying to stop him. Two other victims are now in hospital".

The incident is being treated as terrorism, police said.

ISIS claimed responsibility for the knife attack through its media wing Amaq, the SITE Intelligence Group reported.

UPDATE: A MAN has been shot by police after setting a vehicle on fire and allegedly stabbing a number of people in Melbourne's Bourke St.

Victoris Premier Daniel Andrews described Friday's attack as "evil" but said the city would not be bowed.

Commissioner Ashton also says there is no suggestion that Shire Ali was inspired by James "Dimitrious" Gargasoulas, who is now on trial facing six charges of murder after allegedly mowing down pedestrians in January 2017.