At least four people were killed and at least 15 people were injured during the attack which took place on Drottninggatan (Queen Street), one of the city's major pedestrian streets.
A witness, Serwan Saleme, who was just a few hundred metres away from the attack in Stockholm told Sky News about the mood in the City.
He said: “Everyone’s shocked, everyone shocked right now, everyone's speaking to families and friends to check they’re safe.
“It’s total shock and confusion right now.”
Mr Saleme reiterated that he believed Stockholm was the safest City in the world, which explained why everyone was so shocked by the attack.
The truck drove into crowd and then a building in Stockholm
He added: “Stockholm is the least country you think will have a terror attack.
“All the people living here are from all different backgrounds.
“I don’t think anyone would think something like this would happen here.
“Even after today it is like the safest place to live. I hope it will be like this in the future.
“Unfortunately today it is a bit different right now.”
The witness claimed that people working in the City could not get back home due to the subway being closed.
He said: “I was in the office a few hundred meters away when we heard the police and sirens.
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I don’t think anyone would think something like this would happen here
“People were confused and there was police over there. Police were shouting at people to stay away from the roads.
“All the major stations were closed right now.
“The centre is completely evacuated. Since it is Friday and all the major underground stations are closed, so it’s a lot of people and a lot of traffic.
“We are waiting to see what happens now, there is no way we can go back home unfortunately.”
Following the incident, Swedish Prime Minister Stefan Lofven said all signs pointed to “a terror attack”.
He added: “The Government is naturally being updated continuously and receiving the latest information.
The Stockholm Terror attack – in pictures Fri, April 7, 2017
The vehicle drove into crowds on Drottninggatan (Queen Street) – one of the city's major pedestrian streets, just before 3pm local time, before crashing into Åhlens Mall
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Truck rams into crowds in central Stockholm
“The Government is assisting the authorities in its work and now we are encouraging the public to be alert and listen to the police’s information.”
The public has been warned to stay away from the city centre and a police cordon remains around the area.
National Police Chief Dan Eliasson said in a press conference held earlier that the driver of the vehicle had not been located.
Since then, the Aftonbladet newspaper reported that a man arrested in northern Stockholm has admitted responsibility for the attack.
Crisis teams have been deployed across Stockholm following the truck attack.