Police have charged a man who stopped trams and traffic at a busy Melbourne intersection and stood on the roof of his car, shouting at police to stop him before getting back into his car, doing doughnuts and driving off with officers in pursuit.

Key points: Superintendent Dan Trimble said the man had no weapons on him but a backpack in the man's car was inspected by the bomb squad and deemed safe

Superintendent Dan Trimble said the man had no weapons on him but a backpack in the man's car was inspected by the bomb squad and deemed safe He said police did not believe there were any links to terrorism

He said police did not believe there were any links to terrorism No-one was injured during the incident

The Critical Incident Response Team and local police arrested the 26-year-old man at the intersection of Flinders and William streets at about 2:00pm.

The man has been charged with reckless conduct endangering life and a number of traffic offences.

He was remanded in custody and will appear at the Melbourne Magistrates' Court later today.

Victoria Police Superintendent Dan Trimble said police were called to the area after receiving reports of a car that had pulled up in front of a tram at the intersection of Flinders and Swanston streets.

He said the driver got out of the car and stood on the roof, asking for police to come and stop him.

In scenes eerily similar to those that preceded the 2017 Bourke Street attack, the man then got back into his car and drove in circles around the intersection before speeding down Flinders Street to William Street, where Superintendent Trimble said the man stopped, turned on his hazard lights and was arrested.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 21 seconds 21 s Police arrested the man shortly after he stood on the roof of his car outside Flinders Street Station.

In footage of the scene outside Flinders Street Station, a person on a scooter tried to approach the car and reached towards the passenger side door before the driver tore off.

Superintendent Trimble said the man had no weapons on him but there was a backpack in the car that the bomb squad inspected and deemed safe.

Police set up an exclusion zone around the incident scene.

No-one was injured during the incident.

Superintendent Trimble said police did not believe there were any links to terrorism.

Police blocked parts of Flinders Street and officers surrounded this man. ( Twitter: Julian Kendall )

An eyewitness, Russ, told ABC Radio Melbourne when he saw the car blocking trams in the intersection, he assumed it had broken down.

"Next minute he climbs on his roof and starts screaming and shouting something and then he slid down the bonnet and got in the car and did three doughnuts and took off in a westerly direction.

"Pretty soon there was one of the cop's pursuit cars that went roaring down."

The man's silver Mazda and a backpack in the car were searched by the bomb squad but were deemed safe. ( AAP: James Ross )

Russ described the incident as a "bit scary" and said he stood behind a big pole "in case he went and did what that other guy did and you know, started running over people."

Victorian authorities have put in place multiple safety measures in Melbourne's CBD, including bollards, in the wake of several car attacks in recent years.

In 2017, James Gargasoulas killed six people and injured 27 others when he drove his car through pedestrians along Bourke Street Mall.

In the same year, Saeed Noori killed grandfather Antonio Crocaris and injured 16 people when he drove his car into pedestrians at the intersection of Flinders and Elizabeth streets.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 13 seconds 1 m 13 s Police searched a silver sedan at the intersection.

In November 2018, Hassan Khalif Shire Ali drove a vehicle loaded with gas bottles down Bourke Street before getting out and stabbing three people, killing restaurateur Sisto Malaspina.

Evelyn Hamlett was one of hundreds of city workers whose building went into lockdown during today's police operation.

Ms Hamlett and her 200 colleagues spent the afternoon "staring out the windows" and trying not to worry.

"We saw a lot of police cars down near our building and a lot at the intersection. We saw fire trucks so we got a bit worried," she said.

Evelyn Hamlett was working in the CBD during this incident and during the 2017 Bourke Street attack. ( ABC News: Emilia Terzon )

"It was all a bit scary as we didn't know what was going on."

Ms Hamlett was also working in the CBD during the 2017 Bourke Street attack and said the lockdown brought back memories of that day.

"[Bourke Street] is always in the back of your mind … everybody was a bit on edge," she said.

Video posted to Twitter by a passer-by shows about 10 police cars blocking Flinders Street, as officers approached a silver car.

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One officer could be seen running across the intersection, and appeared to be carrying a large weapon, while many of the officers are in bulletproof vests.

In the video, one person could be seen sitting on the ground surrounded by police officers, next to the silver car.