The clip opens with a car bursting into flames while the suspect tries to attack a group of policemen, before one of them opens fire. A man wielding a shopping cart can be seen trying to help the police.
WARNING: The following footage is graphic and may offend sensibilities
The suspect has been taken to hospital in a critical condition.
Local media report that prior to the skirmish, the suspect set his own car on fire near the intersection of Bourke Street and Swanston Street, a thoroughfare in the city centre. According to Melbourne officials, a number of people are being treated for stab wounds.