Unverified video online shows a vehicle on fire pulled over to the side of the street.
The officers appear on the defensive for the length of the video, stepping away from the man as he continues to advance on them.
'One person has been taken to hospital with a neck injury.
The police can be seen backtracking to avoid the flailing attacker as the trolley-pusher tries to ram him head-on - he falls over in the process, then gets up again and takes control of the trolley once more.
A man has been arrested after a deadly stabbing spree during rush hour in Melbourne's busy central business district on Friday.
'(Officers) were confronted by a male brandishing a knife and threatening them, ' Supt Clayton said.
A courageous bystander dubbed "Trolley Man" has been praised for his selfless actions in his attempt to halt a knife-wielding man who'd stabbed three people in Melbourne's Bourke Street.
"Trolley man", who has not yet been identified, has been praised online for his bravery, alongside several other members of the public who rushed to help the three victims who had been stabbed in the attack.
One person was killed and two were wounded after being attacked by a man.
A fight ensued between officers, members of the public and the offender before the attacker was shot in the chest by officers and taken to hospital in a critical condition under guard.
"Then I heard a loud bang and someone said they could see someone doing chest compressions on someone as an ambulance started coming up the street as well".
One of them has succumbed to injuries, police said.
Police will investigate a possible copy-cat motive.
In a press conference, Victoria Police Superintendent David Clayton told reporters that one of the people stabbed had died at the scene.
"From what we know we are treating this as a terrorism incident", he said at a press conference. A bomb squad has since rendered the vehicle safe.
They park their police auto just behind the burning ute and are immediately attacked.
Memories remain fresh of a fatal but not terror-related attack on the same street previous year, in which a man drove his auto at pedestrians at high speed, killing six people and wounding about 30.
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