LONDON—A convicted terrorist released from prison last year killed two people in a stabbing attack in the heart of London before being shot dead by police Friday, prompting authorities to lock down a busy area on the edge of the financial district and bringing back memories of a 2017 rampage nearby.

Authorities identified the suspect as 28-year-old Usman Khan. He had been convicted in 2012 for terrorism offenses and served time in prison for the part he played in the plot to bomb the London Stock Exchange in 2010.

“He was released from prison in December 2018 on licence and clearly, a key line of enquiry now is to establish how he came to carry out this attack,” said Metropolitan Police Assistant Commissioner Neil Basu.

Police received the first alarm call at 1:58 p.m. local time. Witnesses described a man with a knife appearing to burst out of Fishmongers’ Hall, a historic building on the north side of London Bridge used for events that was hosting a prisoner rehabilitation conference. He was being pushed away from the building by three or four other men, one of them brandishing a fire extinguisher, 48-year-old Gary Lawrence said.

According to a video taken by another witness, several bystanders rushed over to tackle the man, pinning him to the ground. Another man appeared to disarm the suspect, according to the video footage.