The terrifying incident occurred in Melbourne's CBD
Unconfirmed reports say shots were fired during the incident in Melbourne, which happened at 1:30PM local time (2:30AM GMT).
Photos show terrifying scenes in the city’s CBD as emergency services gather near the incident on Bourke street – a busty shopping street.
Melbourne's Royal Children’s Hospital confirmed they are treating four children in connection with the incident.
Victoria police reportedly arrested one person following the incident
Footage posted on Twitter show officers dragging a man out of a battered maroon car.
And witnesses posted video footage of the car appearing to drive erratically in circles in the middle of a busy street.
Police reportedly arrested the driver of the vehicle.
Victoria police took to twitter to request that people stay away from the area.
A spokesman said the incident was related to an earlier stabbing in the Windsor area of the city but ruled out terrorism.
— bwadamson (@BWAdamson) 20 January 2017
They said: "Police are aware that a number of people have been injured in the CBD (central business district).
"The exact circumstances of the events are still being determined.
"Pedestrian access has been closed along Bourke Street between Williams and Swanston.
"Police are asking for the public to avoid the area."
— BenFordham (@BenFordham) 20 January 2017
One witness told The Age newspaper: "Police chased the car down Bourke Street, where they opened fire on the vehicle between William and King Streets.
"The car then went off the road onto the footpath where a witness says it collected a baby in a carrying device or pram.
"The baby flew out from under the car and is being treated by paramedics on the side of the road. "
More to follow…