An Australian man who set fire to a truck laden with gas cylinders in the centre of Melbourne and stabbed one person to death was inspired by Islamic State but did not have direct links with the group, police said yesterday.

Police identified the man responsible for Friday's attack as Somali-born Hassan Khalif Shire Ali, 30, and said he was radicalised and inspired by the militant group's propaganda. He was shot by police and died in hospital.

Police said Shire Ali's Australian passport was cancelled in 2015 after an intelligence report he planned to travel to Syria, but an assessment was made that while he had radical views, he posed no threat to national security.

IS claimed responsibility fortheattack.

"I think it is fair to say he (Shire Ali) was inspired. He was radicalised," Australian Federal Police Acting Deputy Commissioner Ian McCartney told reporters in Melbourne.

Friday's attack began just before the evening rush hour and lasted only minutes. Shire Ali stabbed bystanders and attacked police while his utility truck carrying barbecue gas cylinders burned on busy Bourke Street. The cylinders did not explode and the fire was put out in 10 minutes, by which point the attack was over, though not before one man was fatally stabbed.