UPDATE: A man has been arrested who "deliberately drove into pedestrians in the Bourke Street Mall," killing three and injuring 20, Victoria Police said in a briefing, adding that the incident was not a terrorist attack and that there are no further threats to the public.

Police advised people to avoid the city as it will take "a really long time to process this scene." There are major bus delays around the city, as well as train diversions. For travel updates visit Public Transport Victoria.

Earlier, Ambulance Victoria confirmed on Twitter that “paramedics are treating a number of people after they were hit by a car in Bourke Street in the CBD.”

Victoria Police confirmed in a press briefing that the car, after driving in circles in the intersection of Flinders and Swanston Streets, turned left into Bourke Street Mall, then deliberately drove into the crowd, continued over Elizabeth Street on the footpath and hit more pedestrians.

Witnesses took to Twitter immediately after the incident, describing a police chase and shots fired.

“People were running out of Goldsbrough Lane and the people who were running said that they had heard gunshots," according to Joshua Butler, who was at the scene. "I was at a restaurant on Little Bourke Street and a lot of people were leaving the tables outside and running away, towards Lonsdale Street. We got up and ran. We didn’t know what was going on. We’d just heard that there had been gunshots. I then heard that a car was being chased by the cops.”

Victoria Police tweeted that pedestrian access is closed along Bourke Street between Williams and Swanston. Police are asking for the public to avoid the area.

A witness at the intersection of Williams and Bourke Street, Reggie Smith, told Broadsheet, "I have never seen so many cop cars."

Stay up to date by following Victoria Police and ABC. For travel updates, visit Public Transport Victoria.

This article was updated at 4pm on Friday January 20.