The Bourke Street knifeman has been linked to an accused terrorist alleged to have plotted a mass murder at Federation Square on New Year's Eve.
Victoria Police have identified yesterday's attacker as Hassan Khalif Shire Ali, a 30-year-old Somali-born resident from Melbourne's northwestern suburbs, reports news.com.au.
Police Commissioner Graham Ashton said Khalif was known to counter-terrorism authorities, both "at the national level" and to the state police.
"He's the brother of somebody we arrested late last year, who is currently on remand, in relation to preparation of a terrorism event," he told The Today Show this morning.
The knifeman is the brother of Ali Khalif Shire Ali, an accused terrorist alleged to have plotted a mass murder at Federation Square on New Year's Eve, The Herald Sun reported.
Ali, 21, from Werribee, is facing a Supreme Court trial after pleading not guilty to preparing and collecting documents to commit a terror attack in Federation Square on December 31, 2017.
There is no suggestion Ali had any involvement in his brother's attack yesterday.
Police described him as one of their "high persons of interest" last year, with Deputy Commissioner Shane Patton saying they believed Mr Ali was trying to get an automatic rifle to "shoot and kill as many people as he could" in Melbourne's CBD.
"What we will be alleging is that he was intending to use a firearm to shoot and kill as many people as he could in the Federation Square area on New Year's Eve," he said at the time.
"The male is one of our high-risk persons of interest. We have been monitoring him for a very lengthy period of time.
Police said they moved in because he had been having face-to-face meetings about acquiring a gun.
Police also said Ali had accessed documents produced by Al Qaeda, including a "guidebook" on committing terror attacks and using firearms.
Authorities were keen to stress that no firearm was obtained. But if the attack had been successful the human cost would have been "catastrophic" and "horrendous", Mr Patton said.
The man is also believed to be associated with a group of Victorian extremists.
"We won't identify who they are. It is a very small community of extremist," Mr Patton said.
"There is no ongoing threat posed in respect to New Year's Eve, Christmas or any other area." AFP Acting Deputy Commissioner Ian McCartney said the charges that were expected to be laid were "serious".
"One of the charges carries a maximum penalty of life in prison," he said. Since September 2014, when the national threat terrorism level was raised to "probable", the AFP has worked with its state and territory partners to thwart a number of plots.
Ali's arrest was not linked to any previous operational activity.
"Victoria Police and the Australian Federal Police would like to reassure the community that the threat has been contained and there is no on-going risk posed by this individual," a spokesman for the force added.
"Victoria has well tested, cooperative, counter terrorism and emergency management plans in place and constantly monitor and assess our preparedness to respond to a range of emergencies."