A car has exploded into flames and people are being treated for stab wounds on busy Bourke Street in Melbourne, Australia.

Victoria Police said they responded to reports of a car on fire near the corner of Swanston and Bourke streets at 4:20 p.m. local time.

One man was arrested at the scene and has been taken to the hospital in critical condition.

Several people were also taken to the hospital with stab wounds. Police have cordoned off the area and are encouraging people to avoid the surrounds.

The details surrounding the event remain unclear.

Unverified video online shows a car on fire pulled over to the side of the street. A man can be seen approaching two police officers with what appears to be a knife and attempts to stab them.

Police appear to fire a single shot at the man before he falls to the ground.

Police are not looking for another suspect at this stage.

(Warning: graphic content)

Other video posted online appears to show a man ramming a shopping cart at the attacker as he appears to stab at police officers.

This is a developing story.