A man who allegedly went on a crazed rampage, damaging several taxis in Melbourne’s CBD has been arrested, as taxi drivers watched on in shock.

The 25-year-old man, wielding a bat, smashed windows of at least five taxis near Southern Cross Station just before 9am.

Police arrived a short time later and arrested the man at the scene.

The attacks occurred before 9am. (9NEWS)

Witnesses told 9NEWS 'Osama Bin Laden’ was written on the cricket bat.

“I just pull up on the rank, there was an empty space, he just came with a bat and hit the car and nearly tried to kill me,” one of the drivers said.

“There was something about Osama Bin Laden and a terrorist attack written on the bat.

“I’ve never seen something like that in all my 40 years as a taxi driver.”

Police are investigating the circumstances. (9NEWS)

The man remains in police custody, as the circumstances of the attack are investigated.