A person has died and two others are injured after a knife-wielding man unleashed an attack in Melbourne’s Bourke Street on Friday afternoon.

Police shot the man when he approached officers swinging the knife.

Moments earlier, a ute burst into flames on the busy CBD strip about 4.20pm.

“Police shot the male in the chest and he is now in a critical condition under guard in hospital,” Superintendent David Clayton told media.

“Three people have been stabbed, unfortunately, one is deceased at the scene, two other victims are currently in hospital.”

One witness told the ABC the deceased appeared in his 50s or 60s.

Footage from the scene appears to show the man approach officers with the blade.

A witness told 3AW they saw a pedestrian struck by the vehicle while another said her friends had seen someone with a knife in the area and she’d been told “he’d stabbed a security guard”.

Two men shopping in the area told the ABC they saw a man throw what they thought to be a bomb into his car.

The area has since been cordoned off by the bomb squad.

Superintendent Clayton said there is no known link to terrorism at this stage.

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

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

Witnesses have described hearing a loud bang during the incident. It is unknown whether it came from the vehicle or was police gun fire.

Emergency services were called to a car fire the corner of Swanston and Bourke streets about 4.20pm.

It was brought under control within about five minutes, a Metropolitan Fire Brigade spokeswoman said.

source: 7News