Several bystanders and police officers were attacked by an assailant on central Melbourne's Bourke Street on Friday afternoon.
Officers said they were initially called to a vehicle fire around 4:20pm (AEDT).
"As they got out of the vehicle, they were confronted by a male brandishing a knife and threatening them", Supt David Clayton said in a news conference.
"There is no known link to terrorism at this stage", Clayton said.
Video posted online and on our Facebook page shows the suspect, who appears to be a black male wielding a knife and attacking a two of police officers as courageous members of the public try to "bring him down" with a trolly and a chair.
Victoria's ambulance service said that three injured people were being treated at the scene.
Earlier reports suggested a person had been taken to hospital with a neck injury, in a suspected critical condition, another with a head injury and a third with unknown injuries.
The condition of the other two victims was not yet known.
'Total respect to the shopping trolley hero trying to take down a mad knife man with nothing but a metal basket on not very good wheels, ' one person tweeted.
Initial intelligence suggests the man was a lone offender, with police saying they are not looking for anyone else in relation to the incident.More news: These Women Made History in the Midterms
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'The exact circumstances are yet to be determined at this stage.
"Incredible work by police in Melbourne but also bystanders - one using a trolley to try subdue the man", Cyndi Lavrencic said.
The incident took place at Bourke Street as reported by Victoria Police.
The attacker reportedly torched his auto before the vehicle burst into flames.
"I really wanted to help but I was in shock, I didn't know what to do".
"It's so chaotic", witness Sarah told Tom Elliott.
Chilling footage uploaded to social media shows the suspect repeatedly swinging the weapon at two officers before one of them draws their firearm and opens fire.
"I heard at least one gun shot initially".
"We heard the explosion, and we heard gunshots later", McKellar said.
The fire was brought under control within about five minutes, a Metropolitan Fire Brigade spokeswoman said.