One dead, two injured following stabbing incident in Melbourne

1 killed 2 injured as knife-wielding attacker goes on rampage in central Melbourne

After repeatedly slashing at officers, he was shot.

A man has reportedly been gunned down by police after a vehicle crashed and burst into flames on Bourke Street Mall.

Video showed chaotic scenes as bystanders scattered. The militant group also claimed responsibility for a deadly siege in the city in 2017 when a Somali man was killed by police after taking a woman hostage.

'They ran into a cafe and locked themselves in a kitchen, ' one pedestrian said.

Forensic investigators combed through the scene late Friday, where the dead victim's body lay covered in a white plastic sheet.

After putting out the fire in the auto, authorities found what Ashton described as "barbecue-style" bottles of gasoline inside the vehicle, which prompted authorities to call the bomb response unit to the scene.

Major disruptions are expected in the CBD on Friday evening, as details of a major incident in Bourke Street emerge. "The area has been cordoned off", police said, as they called for "anyone with information or who witnessed the incident is asked to go to Melbourne West Police Station to make a statement".

"Because he was on his stomach, they turned him over to see if he's alright, he was still alive", nearby KFC worker Markel Villasin told AAP.

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Melbourne resident Meegan May tweeted: "Chaos in Bourkest as a guy seems to have set his vehicle on fire then attacking police with a knife".

The witness can be heard screaming as the knifeman gets his weapon just inches from the officer's face.

"I really wanted to help but I was in shock, I didn't know what to do". Gas canisters were later found in the auto.

He was then urged back inside and hid with other terrified witnesses.

Ambulance Victoria confirmed three people were injured.

He was shot by police and died shortly after arriving at hospital under police guard.

The two others, aged 26 and 58, were in hospital with non-life-threatening injuries.

The man was known to Australia's spy agency, ASIO, and had links to convicted terror plotters, according to the Herald Sun.

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