A man who intentionally drove a car into a crowded intersection in the heart of Australia's second-biggest city on Thursday has mental health issues but no known terrorism links, police said.

The 32-year-old Australian man of Afghan descent was known to police and also has a history of drug use, Victoria state Police Acting Chief Commissioner Shane Patton said.

"At this time we do not have any evidence or intelligence to indicate a connection with terrorism," Patton told reporters in Melbourne.