Bourke Street incident: Man shot by police after stabbing and vehicle fire

A vehicle can be seen on fire in Bourke Street Melbourne

One person has been killed and two others wounded as a knife-wielding man went on a rampage in a busy street in central Melbourne.

Victoria Police said the unnamed attacker is in "critical condition" at the hospital following the incident, which left one of the victims dead.

Officers were initially called to reports of a auto fire near Bourke Street, a busy thoroughfare, at about 16:20 local time (05:20 GMT).

The suspect has been arrested and is in hospital in a critical condition, under police guard.

Counter terrorism police have been notified and are investigating.

One person was believed to be in a critical condition in hospital suffering a neck injury, a statement from Ambulance Victoria said.

The spokesperson confirmed that one person had died in the stabbing attacks and that the attacker was in hospital.

Police warned people to avoid the area, but said they "are not looking for anyone further at this early stage".

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

The area has been cordoned off and people have been asked to avoid the area.

When they arrived, they were allegedly confronted by a man who started lunging at them with a knife.

Images from the scene show a large white sheet covering a section of the road near what appears to be blood.

Markel said bystanders were yelling out "just shoot him, just shoot him", while police officers were trying to disarm the attacker.

Police have also urged the public to avoid the Street after witnesses describe a vehicle bursting into flames.

Twitter user Meegan May wrote: "Guy seems to have set his auto on fire, then attacked police with a knife".

Witness are being urged to come forward to police at Melbourne West Station. I heard at least one gunshot initially, ' one said. "People were running", he said.

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