Police "Confident" Bourke Street Incident Was Terror Attack

The assailant has died in hospital.

Police "Confident" Bourke Street Incident Was Terror Attack Image: AAP

The lone terrorist who fatally stabbed a man in Bourke Street on Friday planned to cause an explosion in Melbourne by igniting gas cylinders in his car, police say.

Khalif stabbed three men, with a man in his 60s dying at the scene and two others recovering in Royal Melbourne Hospital.

Police and civilians tried to subdue Khalif before police shot him in the chest. He died in hospital.

Speaking on the Today Show on Saturday morning, Chief Commissioner Graham Ashton said Khalif's car contained gas cylinders and it is believed he intended to cause an explosion.

Police are confident the event was a terrorist attack, which Islamic State has claimed responsibility for.

"It looks like he's attempted to ignite a fire in the car, we believe at this stage with a view to igniting those canisters with some sort of explosion, but that didn't eventuate," Commissioner Ashton says.

He says Khalif was known to police and federal intelligence authority ASIO.

"He's someone that was known to us," he says.

"But he wasn't someone we were actively monitoring to that level."

When asked if police should have shot Khalif in the leg rather than the chest, Commissioner Ashton said police were trained to kill if they believed their life or a member of the public's life was at risk.

"We don't train people to wound people with firearms," he says.

"You're trained to shoot to kill, not to shoot to wound."

He says police have worked through the night and don't believe there are any ongoing threats to the public.

Commissioner Ashton also says there is no suggestion that Khalif was inspired by James "Dimitrious" Gargasoulas, who is currently on trial facing six charges of murder after allegedly mowing down pedestrians in January 2017.

Islamic State has claimed responsibility for the attack.

Commissioner Ashton says Khalif had a criminal history for cannabis use, theft and driving offences.

The bomb squad was called after the barbecue-style gas cylinders were found in the vehicle.

A 26-year-old man and a 58-year-old, said to be Tasmanian businessman Rod Patterson, were taken to hospital with what police said were non-life threatening injuries following the attack.

- AAP

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