SYDNEY -- Police shot a knife-wielding man Friday after he fatally stabbed one person and injured two others in the center of Australia's second-largest city, police said.

The incident, which brought central Melbourne to a standstill in the late afternoon rush, came after police responded to reports of a burning vehicle.

Officers were confronted near the burning car by a man "brandishing a knife and threatening them" while passers-by called out that people had been stabbed, Victoria state police Superintendent David Clayton said.

One of the stabbed people was dead at the scene and two others were taken to a hospital.

Clayton said investigators did not believe there were any other assailants. The man, who was shot in the chest by police, was in critical condition.

Clayton said a bomb squad was making the scene safe. "There's no known link to terrorism at this stage. We'll keep an open mind as to whether there's any link," Clayton said.

Victoria police tweeted a request for witnesses to speak to police and share any images that might help the investigation. (AP)