The man shot by police after he stabbed three people in Melbourne’s Bourke Street has died in hospital.

Chief Commissioner Graham Ashton confirmed that today’s incident is being treated as terror-related.

The three stabbing victims, one dead, were all men.

Commissioner Graham said the man had driven to the area at around 4:10pm this afternoon and deliberately started a fire in the vehicle before fleeing it. Nearby police arrived shortly at the location and the man, wielding a knife, attempted to assault police officers.

Police shot the man in the chest and he was taken to the Royal Melbourne Hospital. Around thirty minutes later, the man succumbed to the gunshot wounds.

Commissioner Ashton said the man was known to police and the federal intelligence agencies.

“He is known to police, mainly in respect to relatives that he has that are persons of interest to us. He is someone who is accordingly known to Victoria Police and the federal intelligence agencies,” he said.

Police found what they described as “barbecue-style gas bottles”, or gas cylinders in the vehicle. The bomb response unit was called and the vehicle was rendered safe.

At this stage, the man can not be identified but he is believed to be from Melbourne’s north-western suburbs.

The man had a minor offending history of cannabis, theft, and driving offences.

Premier Daniel Andrews described today’s incident as “an evil and terrible thing” and condemned it.

He thanked the Victoria Police officers involved and the members of the community who assisted.

“We as a city, will not be defined by this act of evil. We are bigger and stronger than this.”

Commissioner Ashton said weekend events at Flemington and Remembrance Day commemorations will still go ahead as planned.

Police are calling for any witnesses to contact the Melbourne West Police Station.

Witnesses can also upload any vision, video, or photographs of what they saw to the Victoria Police website.

Image: AP / JAMES ROSS