A young child is among four people who are dead after a car was deliberately driven into pedestrians in Melbourne's Bourke Street Mall, police say.

Key points: Police say driver was linked to an earlier stabbing in the city's south

Police say driver was linked to an earlier stabbing in the city's south Children are among the at least 24 people injured

Children are among the at least 24 people injured Police say incident was not terror related

Dimitrious Gargasoulas in a Facebook photo. ( Facebook: Dimitrious Gargasoulas )

It is believed 26-year-old Dimitrious Gargasoulas, also known as James, was the driver. Police have not confirmed his identity.

Police said they shot the suspect before he was arrested on Bourke St. He is under police guard in hospital.

They said he had been linked to an early morning stabbing in the city's south.

A man and a woman, both in their 30s, and the child, were killed in different locations along Bourke St, Police Commissioner Graham Ashton said.

Police announced that a fourth person had died later in the evening.

Police said more than 20 people were injured. Up to five are understood to be in a critical condition.

The injured were taken to The Alfred, St Vincent's, Royal Melbourne and Royal Children's hospitals.

A three-month-old is being operated on after being rushed to the hospital in a police car and a two-year-old is in intensive care.

Commissioner Ashton said at 1:45pm the vehicle entered the city driving erratically and did "burnouts" on the corner of Swanston and Flinders streets.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 23 seconds 23 s CCTV footage shows pedestrians jumping into shops to avoid the car

"The vehicle proceeded up Swanston Street, then turned left into Bourke Street and entered the mall," he said.

"We suspect that [the driver was] intentionally hitting pedestrians. Travelling at speed right through the mall.

Sorry, this video has expired The man was arrested with non-life-threatening injuries

"It has then continued along Bourke Street, continuing over the intersection of Elizabeth Street and it has made its way up to approximately 501, or thereabouts outside the RACV Club in Bourke Street.

"At that time, police intercepted the vehicle, as I understand it, they rammed the vehicle."

The car believed to have been driven through the busy Bourke St Mall was severely damaged. ( AAP: Julian Smith )

Police said they believed the man was involved in a stabbing at 2:15am in Windsor, where he allegedly attacked his brother.

Commissioner Ashton said the suspect was known to police and was also charged over an incident last weekend.

"There is an extensive family violence history involved. He has come to our attention on many occasions in the past. We have mental health and drug-related issues in the background of this particular person," he said.

"He has been coming to our attention more recently over recent days in relation to assaults, family violence-related assaults."

Several pedestrians were hit by the car in Melbourne's CBD during the lunchtime rush. ( AAP: Luke Costin )

He said they attempted to intercept the vehicle this morning but he was driving so erratically they called off the pursuit and called in the air wing.

Commissioner Ashton said there was a woman in the car with the man as he travelled over the Bolte Bridge towards the city from Yarraville. She got out of the car on the bridge.

He said investigators were trying to determine why she was in the car, or if she was being held hostage.

Premier Daniel Andrews praised emergency services, and the many bystanders who came to people's aid. ( ABC News: Margaret Burin )

'A terrible crime has been committed': Premier

Premier Daniel Andrews called the incident "heartbreaking".

"A terrible criminal act was committed this afternoon in the central business district of our great city," he said.

"Our thoughts, our prayers, our love, our best wishes, our profound sympathy are with those who have been so terribly damaged by this evil crime.

"We owe it to them and to the ongoing safety of all Victorians to do this job properly, and we will."

Sorry, this video has expired Victorian Premier Daniel Andrews says he is proud of the state's emergency services' response

Mr Andrews praised emergency services, and the many bystanders who came to people's aid.

"I'm just so proud of all of those Victorians who reached out and provided support and care to strangers," he said.

Lord Mayor Robert Doyle said he saw the car try and turn down Collins Street from Swanston Street, but the driver was deterred by the bollards in place.

"To our absolute horror we watched him turn back onto the footpath on Swanston St at lunchtime on Friday and accelerated down Swanston," he said.

"It was just horrific, you think about how busy Swanston St is at any time of day, but lunchtime on a Friday.

"It's quite unreal. There's an air of unreality, but horror."

Victoria Police redirect pedestrians as parts of the CBD are closed down. ( ABC News: Margaret Burin )

Mohammed Minhaz said he saw three people hit by the car when he was waiting at the corner of Bourke and Queen streets.

"I saw a red car coming from the sidewalk hitting people. He just was driving, he didn't stop for anyone. The people were flying," he said.

Mr Minhaz said he saw the car drive up on the footpath then on pedestrian crossing.

"He hit one person on the footpath," he said.

Sorry, this video has expired Police say the man drove through Bourke St after driving erratically near Flinders Street Station.

Acting Commander Stuart Bateson asked people to avoid the city this afternoon and overnight.

"It is going to take us a really long time to process this scene. Our priority at the moment is with the injured, and it must be that we give them our attention," he said.

"We ask members of the public that perhaps witnessed the incident, if they've left the city, please log your details with Crime Stoppers."



Armed police wearing bullet-proof vests and helmets were seen moving through the area, along with uniformed and plain-clothed officers.

There were also a number of ambulances and paramedics dotted throughout the streets.

Police are seen at the corner of Elizabeth and Bourke streets after a man drives a car into pedestrians. ( ABC News: Margaret Burin )

Witnesses report car driving 'recklessly'

One witness, Laura, said she saw a car being driven recklessly near Flinders Street Station.

"People were trying to stop this man who was driving around and around and he was half hanging outside the car," she said.

Another witness said dozens of police were onto the driver quickly.

Police have arrested a man after the pedestrians were hit. ( AAP: Luke Costin )

"I was just down on the corner and I just heard two gunshots and I just thought it was one of those cars that makes a similar sound," he said.

"Then I heard yelling and screaming and saw the special unit squad car and all of a sudden saw all the armed officers running towards the car, and by the time I got to the vehicle they were all on top of him already."

Former Victoria Police commissioner Christine Nixon saw the incident unfold and said one of the injured was a young child, who appeared to get thrown out of a pram.

"[The mother] she just kept asking me, 'Where's the baby' and [I said] I don't know," Ms Nixon said.

A pram is seen knocked over and a man is stretchered by paramedics at the corner of William and Bourke streets. ( ABC News: Margaret Burin )

Ms Nixon said the car missed her by a metre while she was standing on the corner of Bourke and William streets.

"I kind of just stepped back, and he went by and then continued on down Bourke Street on the footpath, being chased by police officers, who were probably about two or three seconds down the road chasing him," she said.

"I kind of stood there in some shock and surprise to then hear shots, which I clearly now understand to have been Victoria Police, who had fired shots to stop the individual, as I understand it.

"There was a lot of people on the ground, many bystanders ran to help those people."

Myer locked down during the incident

Police say a number of people have been injured in the incident. ( Twitter: Thomas Bick )

Police were said to be on the scene almost instantly, one witness said.

One man in the area at the time said he saw a person lying in the middle of the road.

"I was just walking up Queens Street ready to go to Bourke Street Mall and then I saw people running in the opposite direction away from Bourke Street," he said.

"I asked what happened and someone said shots were fired."

Nearby department store Myer was locked down during the incident, keeping customers inside for a short period, before ushering them out the back onto Little Bourke Street.